okeygroup.lu
Annual Report
2023 O'KEY GROUP
Annual Report
2023 O'KEY GROUP
Contents
Overview 4
2023 at a glance 6
About O’KEY Group 8
Our Geography 12
Main Events of 2023 15
Strategic Report 16
Business Review 18
Russia’s Food Retail Market
Overview 20
Delivering on our Strategy 22
Business model 23
Sustainable Development 24
Operational Review 40
O’KEY Hypermarkets 42
DA! Discounters 51
Financial Review 58
FY 2023 financial highlights 60
Corporate Governance 66
Corporate Governance
System 68
General Meeting
of Shareholders 70
Board of Directors 72
Committees of the Board
of Directors 73
Risk Management 76
Information for Shareholders
and Investors 79
Management & Directors
Responsibility Statement 83
Financial Statements 84
Independent auditors’
report 86
Consolidated financial
statements 91
Glossary 132
Abbreviations 134
Contacts 136
2 – 3 Annual Report Overview Strategic
Report
Operational
Review
Financial
Review Corporate Governance
Financial
Statements 2023
Overview 4
2023 at a glance 6
About O’KEY Group 8
Our Geography 12
Main Events of 2023 15
Strategic Report 16
Business Review 18
Russia’s Food Retail Market
Overview 20
Delivering on our Strategy 22
Business model 23
Sustainable Development 24
Operational Review 40
O’KEY Hypermarkets 42
DA! Discounters 51
Financial Review 58
FY 2023 financial highlights 60
Corporate Governance 66
Corporate Governance
System 68
General Meeting
of Shareholders 70
Board of Directors 72
Committees of the Board
of Directors 73
Risk Management 76
Information for Shareholders
and Investors 79
Management & Directors
Responsibility Statement 83
Financial Statements 84
Independent auditors’
report 86
Consolidated financial
statements 91
Glossary 132
Abbreviations 134
Contacts 136
2 – 3 Annual Report Overview Strategic
Report
Operational
Review
Financial
Review Corporate Governance
Financial
Statements 2023
OVERVIEW
1
O’KEY Group is one of the leading Russian food retailers.
The Group’s business model combines two modern
complementary retail formats (hypermarkets and discounters)
and a fast growing omnichannel e-commerce platform.
21 years
on the market
RUB
207.9 bn
Group revenue in 2023
TOP-10 Grocery retailer in Russia
4 – 5 Annual Report Overview Strategic
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Operational
Review
Financial
Review Corporate Governance
Financial
Statements 2023
1
O’KEY Group is one of the leading Russian food retailers.
The Group’s business model combines two modern
complementary retail formats (hypermarkets and discounters)
and a fast growing omnichannel e-commerce platform.
21 years
on the market
RUB
207.9 bn
Group revenue in 2023
TOP-10 Grocery retailer in Russia
4 – 5 Annual Report Overview Strategic
Report
Operational
Review
Financial
Review Corporate Governance
Financial
Statements 2023
2023 at a glance
1 Market position provided by Infoline, 2023.
297
+24 YoY
Total number of stores
TOP-10
Grocery retailer in Russia 1
RUB 207.9 bn
+2.8% YoY
Group revenue
77
O’KEY hypermarkets
220
DA! discounters
RUB 7.7 bn
+24.0% YoY
Total online sales
About the Report
The Annual Report 2023 (“the Report”) has been prepared
by O’KEY GROUP S.A. (“O’KEY Group”, “the Group”,
or “the Company”).
This Report discloses information on the implementation
of the Group’s strategy in 2023, presents the Group’s
operating and financial results, and describes the Group’s
corporate governance framework and corporate social
responsibility activities. The Report has been prepared
based on consolidated IFRS financial statements for 2023.
The Report has been prepared based on the information
available to the Group as of the time of producing
this Report, including information obtained from third
parties. The Company reasonably believes that this
information is complete and accurate as of the publication
date of this Report. However, it does not constitute
any representation or warranty that this information
will not be updated, revised, or otherwise amended
in the future.
This Report includes estimates or forward-looking
statements related to operating, financial, economic,
social, and other measures that can be used to assess
the performance of O’KEY GROUP S.A. The Company does
not make any representation or warranty that the results
anticipated by such forward-looking statements
will be achieved. The Company shall not be liable
to any individual or legal entity for any loss or damage
which may arise from their reliance on such forward-
looking statements.
Further Information
Further information regarding O’KEY Group’s strategy,
our businesses and performance, our approach
to governance and risk management can be found at our
corporate website www.okgroup.lu.
An archive of annual and strategic reports as well as a full
suite of additional information materials are available
at www.okeygroup.lu.
Disclaimer
The existing global economic environment, including
the current geopolitical climate and market fluctuations
in currency and stock markets, as well as significant
currency exchange rate variations, is probably having
an impact on companies in all sectors of the economy.
We are closely observing the potential effects of these
evolving macroeconomic circumstances and shifts
in the retail market on the O’KEY Group’s financial
and operational performance in the medium to long term.
Nonetheless, we acknowledge that the grocery
retail industry is among the most resilient sectors
of the economy and is continually sought after
by consumers. Furthermore, we have confidence
in the Group’s efficient business strategy, which utilises
two complementary retail formats and a robust online
platform that caters to all customer requirements
and demographics. This approach establishes a strong
foothold in the market and provides a considerable buffer
against macroeconomic instability.
Our Company is well-equipped to handle any potential
alterations in the supply chain due to the fact that
around 80% of our procurement is obtained from nearby
suppliers and manufacturers. By actively fostering our
proprietary brands, maintaining our long-standing
and productive partnerships with a significant number
of inventive, advanced, and rapidly expanding farms
and producers, and participating in regional and national
quality initiatives and programmes that support local
suppliers, we can successfully navigate any market
challenges and uncertainties.
Therefore, O’KEY Group, with its well-established
and well-integrated corporate governance
and management structure, is securely positioned
in the market and poised to withstand macroeconomic
turbulence and market volatility, while effectively serving
the needs of its stakeholders.
6 – 7 Annual Report Overview Strategic
Report
Operational
Review
Financial
Review Corporate Governance
Financial
Statements 2023
1 Market position provided by Infoline, 2023.
297
+24 YoY
Total number of stores
TOP-10
Grocery retailer in Russia 1
RUB 207.9 bn
+2.8% YoY
Group revenue
77
O’KEY hypermarkets
220
DA! discounters
RUB 7.7 bn
+24.0% YoY
Total online sales
About the Report
The Annual Report 2023 (“the Report”) has been prepared
by O’KEY GROUP S.A. (“O’KEY Group”, “the Group”,
or “the Company”).
This Report discloses information on the implementation
of the Group’s strategy in 2023, presents the Group’s
operating and financial results, and describes the Group’s
corporate governance framework and corporate social
responsibility activities. The Report has been prepared
based on consolidated IFRS financial statements for 2023.
The Report has been prepared based on the information
available to the Group as of the time of producing
this Report, including information obtained from third
parties. The Company reasonably believes that this
information is complete and accurate as of the publication
date of this Report. However, it does not constitute
any representation or warranty that this information
will not be updated, revised, or otherwise amended
in the future.
This Report includes estimates or forward-looking
statements related to operating, financial, economic,
social, and other measures that can be used to assess
the performance of O’KEY GROUP S.A. The Company does
not make any representation or warranty that the results
anticipated by such forward-looking statements
will be achieved. The Company shall not be liable
to any individual or legal entity for any loss or damage
which may arise from their reliance on such forward-
looking statements.
Further Information
Further information regarding O’KEY Group’s strategy,
our businesses and performance, our approach
to governance and risk management can be found at our
corporate website www.okgroup.lu.
An archive of annual and strategic reports as well as a full
suite of additional information materials are available
at www.okeygroup.lu.
Disclaimer
The existing global economic environment, including
the current geopolitical climate and market fluctuations
in currency and stock markets, as well as significant
currency exchange rate variations, is probably having
an impact on companies in all sectors of the economy.
We are closely observing the potential effects of these
evolving macroeconomic circumstances and shifts
in the retail market on the O’KEY Group’s financial
and operational performance in the medium to long term.
Nonetheless, we acknowledge that the grocery
retail industry is among the most resilient sectors
of the economy and is continually sought after
by consumers. Furthermore, we have confidence
in the Group’s efficient business strategy, which utilises
two complementary retail formats and a robust online
platform that caters to all customer requirements
and demographics. This approach establishes a strong
foothold in the market and provides a considerable buffer
against macroeconomic instability.
Our Company is well-equipped to handle any potential
alterations in the supply chain due to the fact that
around 80% of our procurement is obtained from nearby
suppliers and manufacturers. By actively fostering our
proprietary brands, maintaining our long-standing
and productive partnerships with a significant number
of inventive, advanced, and rapidly expanding farms
and producers, and participating in regional and national
quality initiatives and programmes that support local
suppliers, we can successfully navigate any market
challenges and uncertainties.
Therefore, O’KEY Group, with its well-established
and well-integrated corporate governance
and management structure, is securely positioned
in the market and poised to withstand macroeconomic
turbulence and market volatility, while effectively serving
the needs of its stakeholders.
6 – 7 Annual Report Overview Strategic
Report
Operational
Review
Financial
Review Corporate Governance
Financial
Statements 2023
About O’KEY Group
O’KEY Group is one of the leading Russian food retailers.
Since the opening of our first hypermarket in St. Petersburg
in 2002, we have continued to strive for excellence.
O’KEY Group develops two clearly positioned and complementary
retail formats: O’KEY hypermarkets and DA! discounters.
The Company also operates an online platform for O’KEY
hypermarkets. This well-balanced combination of formats
allows us to meet different customer needs and purchasing
models in all regions of presence and in all sales channels.
Our vision
The new hypermarket
for the new era
The best value for money
discounter
Our purpose/mission
We strive
for excellence
We offer fresh
and high-quality
products to each
family
We provide a simple
and easy shopping
experience
We aim to create
an effective
working
environment
We take our social
responsibility
seriously and act
accordingly
Our values
Innovativeness
Outstanding
results
Impeccable
service
Atmosphere
of professionalism
Effective
team
8 – 9 Annual Report Overview Strategic
Report
Operational
Review
Financial
Review Corporate Governance
Financial
Statements 2023
O’KEY Group is one of the leading Russian food retailers.
Since the opening of our first hypermarket in St. Petersburg
in 2002, we have continued to strive for excellence.
O’KEY Group develops two clearly positioned and complementary
retail formats: O’KEY hypermarkets and DA! discounters.
The Company also operates an online platform for O’KEY
hypermarkets. This well-balanced combination of formats
allows us to meet different customer needs and purchasing
models in all regions of presence and in all sales channels.
Our vision
The new hypermarket
for the new era
The best value for money
discounter
Our purpose/mission
We strive
for excellence
We offer fresh
and high-quality
products to each
family
We provide a simple
and easy shopping
experience
We aim to create
an effective
working
environment
We take our social
responsibility
seriously and act
accordingly
Our values
Innovativeness
Outstanding
results
Impeccable
service
Atmosphere
of professionalism
Effective
team
8 – 9 Annual Report Overview Strategic
Report
Operational
Review
Financial
Review Corporate Governance
Financial
Statements 2023
Our Key Strengths
● A flexible business model based on two competitive
shopping formats and an e-commerce platform,
covering all customer segments and needs
● O’KEY hypermarket: a well-recognised brand
and market positioning in major Russian cities
● DA! discounters: one of the fastest
growing grocery chains in the market
● A TOP10 e-grocery retailer with a 100% online
coverage of the cities of O’KEY presence
● Exceptional expertise in private labels
and own production, empowering us to build
an appealing customer value proposition
● Highly centralised logistics: five distribution
centres in Moscow and St. Petersburg
● Focus on cutting-edge IT solutions
and a progressive infrastructure
● High standards of corporate governance: a transparent
ownership structure, a Astana International Exchange,
London Stock Exchange and Moscow Exchange listing,
and a proficient management team with extensive
experience in Russian and international retail
Our ESG Approach
In the volatile macroeconomic and geopolitical context
we are facing, ESG is becoming even more relevant and important.
O’KEY Group sees itself as a socially responsible company
and acts respectively in the interests of all our stakeholders:
employees, customers, suppliers, partners, and shareholders.
Customers
Satisfying customer needs across all market segments,
delivering top-notch services and creating the value
proposition of each Group format remains the key priority
of O’KEY’s interaction with customers.
Though the economic environment is unstable, we make
every effort to ensure uninterrupted deliveries, redirect
logistics flows where necessary, fill the shelves with goods
and meet the demand of our customers.
In the face of growing inflation, we were one of the first
to fix a minimum markup on a number of essentials.
We find it important to pay attention to the most
recent changes in consumption patterns and needs,
including the rush in demand for certain product
categories and price sensitivity. The Company
is committed to meeting the current rate of demand
and maintaining a minimum markup on socially important
goods as well as reasonable prices for the entire product
range, while providing a consistently high level of quality
and service. We are developing new routes and searching
for new efficient ways of working with suppliers in order
to keep the wide assortment of our products.
A thorough cost control in all areas of the Group’s
business enables us to ensure a decent price level
and competitiveness of all retail formats in general.
The Company works closely with the Association of Retail
Companies, the Russian Ministry of Industry and Trade,
and other market regulators and structures to execute
this approach.
Suppliers
When communicating with suppliers, the utmost
attention is given to the formation of mutually beneficial
partnerships. This will ensure timely and stable supply
of high-quality items as well as presence of various
products on the shelves no matter what.
Since its foundation, the O’KEY Group has been actively
engaging local producers: around 80% of the Company’s
purchases are accounted for by products made by Russian
producers. As such, the share of imported goods
in the Company is small.
For years, the Group has been cooperating
with a substantial number of innovative, sophisticated
and fast-growing farms and producers. This is specifically
relevant in terms of evolving the Group’s own brands:
the private label range of O’KEY hypermarkets
and DA! discounters totals 1,910 SKUs and 1,367 SKUs,
respectively. The Company is also involved in developing
programmes to support local producers and therefore
takes part in regional and national quality initiatives,
namely “Made on Don”, as well as the initiatives for fair
certification in the Northwest and Central regions
of Russia. Amid economic volatility O’KEY Group further
cooperates with them while ensuring regular purchases
and mutual benefits. Changes in market environment may
lead to changes in supply chains which are nevertheless
quite stable due to a high proportion of Russian-made
products. The Company makes efforts to optimise
logistical costs and provide effective inventory
management.
Investors and shareholders
O’KEY is responsible to its investors and shareholders
and strives to maintain and increase the Company’s
shareholder value.
Considering current volatility of the Russian Rouble
and a number of macroeconomic factors that create
great uncertainty, the Company refrains from short-term
and long-term forecasts for both operating and financial
performance. At present, the O’KEY management
team is analysing the potential impact of micro-
and macroeconomic conditions on subsequent operating
and financial results of the Group.
Along with that, we believe that the Group’s effective
business model, which is based on two complementary
retail chains with clear positioning (hypermarkets
and discounters) as well as on strong e-commerce,
will help respond to all the headwinds and satisfy
customer needs in various market segments.
Hypermarkets are most suitable for new consumer
behaviour since they offer a wide range of products
and customers often stock up. Our discounters
build a solid medium-term basis by using the EDLP
pricing model to meet the trend for conscious
consumption and offer consistently high-quality
products at the lowest market prices.
We will be doing our best to achieve our medium-term
goals by means of supply chain optimisation and strict
cost control.
The Group’s Global Depositary Receipts (GDRs) are listed
on London Stock Exchange since November 2010.
The GDRs have been also trading on Moscow Exchange
(MOEX) since December 2020. O’KEY aims to keep
its GDRs available to all market participants, including
those of individual investors, on MOEX. In March 2023,
in order to further increase the liquidity of its stock
and diversify the investor base, the Group listed its GDRs
on the Astana International Exchange.
Employees
O’KEY Group’s first priority is its people. The Company
employs over 19 thousand people. We take responsibility
for providing residents of regions of the Company’s
presence with jobs as well as for creating safe, favourable
and decent working conditions for our employees.
Besides, we steadfastly follow the Labour Code
of the Russian Federation.
Over the years, the Company has been committed
to delivering high-standard corporate governance,
personnel management and training, and, therefore,
gained a high position in the market.
In 2023, O’KEY Group put much effort into ensuring
labour safety for its employees, improved its corporate
voluntary health insurance and target KPIs under
the current premium programme, continued staff training
as part of O’KEY Academy, and launched professional skills
competitions and incentive programmes.
In a context of volatility, the Company continues being
committed to its policy aimed at preserving jobs, providing
decent wages and social benefits, and developing
personnel training and motivation programmes.
10 – 11 Annual Report Overview Strategic
Report
Operational
Review
Financial
Review Corporate Governance
Financial
Statements 2023
● A flexible business model based on two competitive
shopping formats and an e-commerce platform,
covering all customer segments and needs
● O’KEY hypermarket: a well-recognised brand
and market positioning in major Russian cities
● DA! discounters: one of the fastest
growing grocery chains in the market
● A TOP10 e-grocery retailer with a 100% online
coverage of the cities of O’KEY presence
● Exceptional expertise in private labels
and own production, empowering us to build
an appealing customer value proposition
● Highly centralised logistics: five distribution
centres in Moscow and St. Petersburg
● Focus on cutting-edge IT solutions
and a progressive infrastructure
● High standards of corporate governance: a transparent
ownership structure, a Astana International Exchange,
London Stock Exchange and Moscow Exchange listing,
and a proficient management team with extensive
experience in Russian and international retail
Our ESG Approach
In the volatile macroeconomic and geopolitical context
we are facing, ESG is becoming even more relevant and important.
O’KEY Group sees itself as a socially responsible company
and acts respectively in the interests of all our stakeholders:
employees, customers, suppliers, partners, and shareholders.
Customers
Satisfying customer needs across all market segments,
delivering top-notch services and creating the value
proposition of each Group format remains the key priority
of O’KEY’s interaction with customers.
Though the economic environment is unstable, we make
every effort to ensure uninterrupted deliveries, redirect
logistics flows where necessary, fill the shelves with goods
and meet the demand of our customers.
In the face of growing inflation, we were one of the first
to fix a minimum markup on a number of essentials.
We find it important to pay attention to the most
recent changes in consumption patterns and needs,
including the rush in demand for certain product
categories and price sensitivity. The Company
is committed to meeting the current rate of demand
and maintaining a minimum markup on socially important
goods as well as reasonable prices for the entire product
range, while providing a consistently high level of quality
and service. We are developing new routes and searching
for new efficient ways of working with suppliers in order
to keep the wide assortment of our products.
A thorough cost control in all areas of the Group’s
business enables us to ensure a decent price level
and competitiveness of all retail formats in general.
The Company works closely with the Association of Retail
Companies, the Russian Ministry of Industry and Trade,
and other market regulators and structures to execute
this approach.
Suppliers
When communicating with suppliers, the utmost
attention is given to the formation of mutually beneficial
partnerships. This will ensure timely and stable supply
of high-quality items as well as presence of various
products on the shelves no matter what.
Since its foundation, the O’KEY Group has been actively
engaging local producers: around 80% of the Company’s
purchases are accounted for by products made by Russian
producers. As such, the share of imported goods
in the Company is small.
For years, the Group has been cooperating
with a substantial number of innovative, sophisticated
and fast-growing farms and producers. This is specifically
relevant in terms of evolving the Group’s own brands:
the private label range of O’KEY hypermarkets
and DA! discounters totals 1,910 SKUs and 1,367 SKUs,
respectively. The Company is also involved in developing
programmes to support local producers and therefore
takes part in regional and national quality initiatives,
namely “Made on Don”, as well as the initiatives for fair
certification in the Northwest and Central regions
of Russia. Amid economic volatility O’KEY Group further
cooperates with them while ensuring regular purchases
and mutual benefits. Changes in market environment may
lead to changes in supply chains which are nevertheless
quite stable due to a high proportion of Russian-made
products. The Company makes efforts to optimise
logistical costs and provide effective inventory
management.
Investors and shareholders
O’KEY is responsible to its investors and shareholders
and strives to maintain and increase the Company’s
shareholder value.
Considering current volatility of the Russian Rouble
and a number of macroeconomic factors that create
great uncertainty, the Company refrains from short-term
and long-term forecasts for both operating and financial
performance. At present, the O’KEY management
team is analysing the potential impact of micro-
and macroeconomic conditions on subsequent operating
and financial results of the Group.
Along with that, we believe that the Group’s effective
business model, which is based on two complementary
retail chains with clear positioning (hypermarkets
and discounters) as well as on strong e-commerce,
will help respond to all the headwinds and satisfy
customer needs in various market segments.
Hypermarkets are most suitable for new consumer
behaviour since they offer a wide range of products
and customers often stock up. Our discounters
build a solid medium-term basis by using the EDLP
pricing model to meet the trend for conscious
consumption and offer consistently high-quality
products at the lowest market prices.
We will be doing our best to achieve our medium-term
goals by means of supply chain optimisation and strict
cost control.
The Group’s Global Depositary Receipts (GDRs) are listed
on London Stock Exchange since November 2010.
The GDRs have been also trading on Moscow Exchange
(MOEX) since December 2020. O’KEY aims to keep
its GDRs available to all market participants, including
those of individual investors, on MOEX. In March 2023,
in order to further increase the liquidity of its stock
and diversify the investor base, the Group listed its GDRs
on the Astana International Exchange.
Employees
O’KEY Group’s first priority is its people. The Company
employs over 19 thousand people. We take responsibility
for providing residents of regions of the Company’s
presence with jobs as well as for creating safe, favourable
and decent working conditions for our employees.
Besides, we steadfastly follow the Labour Code
of the Russian Federation.
Over the years, the Company has been committed
to delivering high-standard corporate governance,
personnel management and training, and, therefore,
gained a high position in the market.
In 2023, O’KEY Group put much effort into ensuring
labour safety for its employees, improved its corporate
voluntary health insurance and target KPIs under
the current premium programme, continued staff training
as part of O’KEY Academy, and launched professional skills
competitions and incentive programmes.
In a context of volatility, the Company continues being
committed to its policy aimed at preserving jobs, providing
decent wages and social benefits, and developing
personnel training and motivation programmes.
10 – 11 Annual Report Overview Strategic
Report
Operational
Review
Financial
Review Corporate Governance
Financial
Statements 2023
Our Geography
Voronezh
Lipetsk
Tula region
Ryazan region
Tver region
8
19
12
7
3
2
1
Kaluga region
Moscow region
Vladimir region
Ivanovo
1 16 36
135
Мoscow
Central Federal District
Number of stores
O ’ KEY hypermarket DA! discounters 78
78
78 74 71
69 60 52 42 35 28
77
118 78
152 79
194 77
220
100 82
67 54 35
23 17
2009 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 2022 2023 2007 2008
3
24
2
2 2
3
3
3
3 4
1 1
1
1
1
1
1
1
Central Federal
District
Sochi
Rostov-on-Don
St. Petersburg
Murmansk
Syktyvkar
Tyumen
Nizhniy Novgorod
Togliatti
Astrakhan
Orenburg
Ekaterinburg
Krasnodar
Surgut
Ufa
Novosibirsk Krasnoyarsk
100 %
63%
Сentralization
rate
100%
Centralisation rate
5 5 total DCs
1 DC
4 DCs
for hypermarkets
for discounters
297 total stores
77 O’ KEY hypermarkets
220 DA! discounters
online coverage in cities of
O’ KEY presence
Omsk
Irkutsk
O’ KEY online delivery
Online delivery via partners
O’ KEY hypermarkets
DA! discounters
O’ KEY distribution centers
DA! distribution centers
O’ KEY Group retail
space in 2023 ( km 2
)
Hypermarkets Discounters Group
North
-West
148.1
148.1
East
South
Central
Total
209.0
106.7
97.9
102.2
515.8
209.0
106.7
97.9
250.3
663.9
12 – 13 Annual Report Overview Strategic
Report
Operational
Review
Financial
Review Corporate Governance
Financial
Statements 2023
Voronezh
Lipetsk
Tula region
Ryazan region
Tver region
8
19
12
7
3
2
1
Kaluga region
Moscow region
Vladimir region
Ivanovo
1 16 36
135
Мoscow
Central Federal District
Number of stores
O ’ KEY hypermarket DA! discounters 78
78
78 74 71
69 60 52 42 35 28
77
118 78
152 79
194 77
220
100 82
67 54 35
23 17
2009 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 2022 2023 2007 2008
3
24
2
2 2
3
3
3
3 4
1 1
1
1
1
1
1
1
Central Federal
District
Sochi
Rostov-on-Don
St. Petersburg
Murmansk
Syktyvkar
Tyumen
Nizhniy Novgorod
Togliatti
Astrakhan
Orenburg
Ekaterinburg
Krasnodar
Surgut
Ufa
Novosibirsk Krasnoyarsk
100 %
63%
Сentralization
rate
100%
Centralisation rate
5 5 total DCs
1 DC
4 DCs
for hypermarkets
for discounters
297 total stores
77 O’ KEY hypermarkets
220 DA! discounters
online coverage in cities of
O’ KEY presence
Omsk
Irkutsk
O’ KEY online delivery
Online delivery via partners
O’ KEY hypermarkets
DA! discounters
O’ KEY distribution centers
DA! distribution centers
O’ KEY Group retail
space in 2023 ( km 2
)
Hypermarkets Discounters Group
North
-West
148.1
148.1
East
South
Central
Total
209.0
106.7
97.9
102.2
515.8
209.0
106.7
97.9
250.3
663.9
12 – 13 Annual Report Overview Strategic
Report
Operational
Review
Financial
Review Corporate Governance
Financial
Statements 2023
In 2023, O’KEY introduced a mentoring system that
involves not only new employees but also existing
ones aimed at horizontal or vertical development
in the mentoring format.
Financial & Operational
Highlights
Indicators 2021 2022 2023 2023/2022, %
Group net retail revenue, RUB bn 185.2 200.2 205.8 +2.8%
• O’KEY net retail revenue, RUB bn 150.4 146.9 141.9 (3.4%)
• DA! net retail revenue, RUB bn 34.8 53.3 63.8 +19.8%
Group LFL net retail revenue, % +3.7% +2.1% (1.6%)
• O’KEY LFL net retail revenue, % +1.4% (3.6%) (3.3%)
• DA! LFL net retail revenue, % +16.3% +26.8% +3.0%
Total selling space, k m2 625.6 656.2 663.9 +1.1%
• O’KEY selling space, k m2 522.7 525.8 515.8 (1.9%)
• DA! selling space, k m2 102.9 130.4 148.1 +13.2%
Total revenue, RUB bn 187.1 202.2 207.9 +2.8%
• O’KEY Revenue, RUB bn 152.3 148.8 144.0 (3.3%)
• DA! Revenue, RUB bn 34.8 53.3 63.9 +19.8%
Group EBITDA, RUB bn 15.5 17.0 17.0 -
Main Events
of 2023
November
The Group receives
primary listing for its GDRs on
Moscow Exchange, in addition
to its primary listing on LSE
and secondary listing on AIX
The Group changes its corporate
management structure
and appoints two CEOs
of hypermarket and discounter
chains with direct reporting
to the Board of Directors
March
The Group lists its GDRs
on Astana International
Exchange
April
The Company opens
a new O’KEY hypermarket
in St. Petersburg
June
O’KEY’s a RUB5.0 bn bonds issue
starts trading on the Moscow Exchange
June
Expert RA rating agency
confirms the “ruA-“ credit rating
with Stable outlook for O’KEY
July
NCR rating agency
assigns O`KEY ‘A.RU’
credit rating with Stable outlook
14 – 15 Annual Report Overview Strategic
Report
Operational
Review
Financial
Review Corporate Governance
Financial
Statements 2023
involves not only new employees but also existing
ones aimed at horizontal or vertical development
in the mentoring format.
Financial & Operational
Highlights
Indicators 2021 2022 2023 2023/2022, %
Group net retail revenue, RUB bn 185.2 200.2 205.8 +2.8%
• O’KEY net retail revenue, RUB bn 150.4 146.9 141.9 (3.4%)
• DA! net retail revenue, RUB bn 34.8 53.3 63.8 +19.8%
Group LFL net retail revenue, % +3.7% +2.1% (1.6%)
• O’KEY LFL net retail revenue, % +1.4% (3.6%) (3.3%)
• DA! LFL net retail revenue, % +16.3% +26.8% +3.0%
Total selling space, k m2 625.6 656.2 663.9 +1.1%
• O’KEY selling space, k m2 522.7 525.8 515.8 (1.9%)
• DA! selling space, k m2 102.9 130.4 148.1 +13.2%
Total revenue, RUB bn 187.1 202.2 207.9 +2.8%
• O’KEY Revenue, RUB bn 152.3 148.8 144.0 (3.3%)
• DA! Revenue, RUB bn 34.8 53.3 63.9 +19.8%
Group EBITDA, RUB bn 15.5 17.0 17.0 -
Main Events
of 2023
November
The Group receives
primary listing for its GDRs on
Moscow Exchange, in addition
to its primary listing on LSE
and secondary listing on AIX
The Group changes its corporate
management structure
and appoints two CEOs
of hypermarket and discounter
chains with direct reporting
to the Board of Directors
March
The Group lists its GDRs
on Astana International
Exchange
April
The Company opens
a new O’KEY hypermarket
in St. Petersburg
June
O’KEY’s a RUB5.0 bn bonds issue
starts trading on the Moscow Exchange
June
Expert RA rating agency
confirms the “ruA-“ credit rating
with Stable outlook for O’KEY
July
NCR rating agency
assigns O`KEY ‘A.RU’
credit rating with Stable outlook
14 – 15 Annual Report Overview Strategic
Report
Operational
Review
Financial
Review Corporate Governance
Financial
Statements 2023
16 – 17
Annual Report
Overview
Strategic
Report
Operational
Review
Financial
Review Corporate Governance
Financial
Statements 2023
STRATEGIC
REPORT
2
We understand the importance of a socially
responsible business and implement the best principles
and approaches toward sustainable development.
297 stores
across Russia
RUB
407 mn
Social benefits in 2023
19,230
Employees
Report
Operational
Review
Financial
Review Corporate Governance
Financial
Statements 2023
STRATEGIC
REPORT
2
We understand the importance of a socially
responsible business and implement the best principles
and approaches toward sustainable development.
297 stores
across Russia
RUB
407 mn
Social benefits in 2023
19,230
Employees
18 – 19
Annual Report
Overview
Strategic
Report
Operational
Review
Financial
Review Corporate Governance
Financial
Statements 2023
Business Review
O’KEY Group managed to demonstrate solid results
despite the turbulent market environment over the
reporting year. We were able to maintain a stable
performance in our hypermarket format and continued to
grow across our discounters and e-commerce business.
In 2023, we were again among the top ten Russian food
retailers based on annual revenue and market share.
Group revenue rose by 2.8% to RUB 207.9 bn, while the
Group’s EBITDA remained stable at RUB 17.0 bn, with
EBITDA margin comprising 8.2%.
We believe that our hypermarkets will continue to thrive
in the current and future market landscape thanks to our
vast sourcing opportunities, our agile response to the
constantly changing market conditions, the synergy effect
with our discounters and the e-commerce business as well
as the smart management and the prudent cost control.
As cost-cautious consumption is increasingly popular in
the current economic volatility, we saw another strong
year of growth in the discounters segment in 2023. The
DA! network with its 220 stores in the Central region
showed both expansion and LFL growth, resulted in a
19.8% YoY net retail revenue increase, reaching 31.0%
of the Group’s net retail revenue in 2023. Despite
experiencing some temporary pressure from newly
opened immature stores, the discounters’ EBITDA grew
by 20.3% YoY, while EBITDA margin also improved and
reached 6.9% in 2023.
A key element contributing to the DA! success, along
with operational and cost effectiveness and EDLP pricing
policy, is the prudent selection of our own brands,
comprising approximately 50% of the discounter’s
revenue. Over 2023, we continued to develop a long-term
and mutually beneficial partnership with local suppliers,
enabling us to introduce new SKUs into our offerings.
We strongly believe that DA! is ideally positioned to grow
in today’s challenging environment and will remain a key
growth driver for the Group, being a unique international
format, specially tailored to the needs and desires of
Russian customers.
We consider online shopping a significant catalyst for
transformation in the highly competitive retail sector both
in the way it affects the conventional offline formats and
simultaneously emerging as a promising sales channel in its
own right. The online grocery market in Russia witnessed
another year of rapid growth to reach RUB 918 bn in 2023.
O’KEY’s total online sales rose by 24.0% YoY to RUB 7.7
bn in 2023. We used both our own delivery services and
partner capacities to fulfil almost 3.5 mn online orders
in 2023. By the end of the reporting year, we operated
36 e-commerce pick-up and delivery points at O’KEY
hypermarkets in key cities of pour presence: Moscow, St.
Petersburg, Sochi, and Krasnodar.
Throughout the year, we strived to maintain the high
level of our corporate governance system, which is based
on the principles of professionalism, accountability,
equality, and transparency in compliance with the best
international and Russian practices. In 2023, we again
saw the recognition of our efficient risk management,
strategic oversight, and transparency, coupled with a
well-established operational and financial position, as
Expert RA confirmed our “ruA-” credit rating with a stable
outlook. Later in 2023, NCR credit rating agency awarded
the Company with an “A.ru” rating with a stable outlook,
highly appreciating the Group’s significant geographical
distribution, a diversified supplier base, and the successful
development of the discounter format as a response to
current trends in consumer demand in Russia.
Despite the current market fluctuations, we are dedicated
to actively communicating and accommodating the
interests of all our investors and shareholders. In March
2023, O’KEY GROUP S.A. obtained a listing of its GDRs
on the Astana International Exchange (AIX). This is aimed
to further increase the liquidity of our stock and provide
access to a wider range of individual and institutional
investors. In November 2023, we also changed our GDRs’
listing status on the Moscow Exchange to primary. The
registration of the prospectus and receiving primary
listing status aims to maintain the continuity of trading of
the Group’s GDRs on the Moscow Exchange in order to
sustain the growth of the stock liquidity in the future.
Outlook
Despite the challenges faced by various sectors of the
economy, we recognise that the grocery retail industry
remains highly resilient and is continually sought after by
customers. Additionally, we believe in the Group’s efficient
business approach, which includes two complementary
retail formats and an omnichannel online platform that
addresses the needs of all customer segments. With the
integration of this approach and a proven corporate
governance structure alongside the streamlined
operational management, our ability to maintain a sound
foothold in the market and minimise the impact of any
economic fluctuations is assured.
Report
Operational
Review
Financial
Review Corporate Governance
Financial
Statements 2023
Business Review
O’KEY Group managed to demonstrate solid results
despite the turbulent market environment over the
reporting year. We were able to maintain a stable
performance in our hypermarket format and continued to
grow across our discounters and e-commerce business.
In 2023, we were again among the top ten Russian food
retailers based on annual revenue and market share.
Group revenue rose by 2.8% to RUB 207.9 bn, while the
Group’s EBITDA remained stable at RUB 17.0 bn, with
EBITDA margin comprising 8.2%.
We believe that our hypermarkets will continue to thrive
in the current and future market landscape thanks to our
vast sourcing opportunities, our agile response to the
constantly changing market conditions, the synergy effect
with our discounters and the e-commerce business as well
as the smart management and the prudent cost control.
As cost-cautious consumption is increasingly popular in
the current economic volatility, we saw another strong
year of growth in the discounters segment in 2023. The
DA! network with its 220 stores in the Central region
showed both expansion and LFL growth, resulted in a
19.8% YoY net retail revenue increase, reaching 31.0%
of the Group’s net retail revenue in 2023. Despite
experiencing some temporary pressure from newly
opened immature stores, the discounters’ EBITDA grew
by 20.3% YoY, while EBITDA margin also improved and
reached 6.9% in 2023.
A key element contributing to the DA! success, along
with operational and cost effectiveness and EDLP pricing
policy, is the prudent selection of our own brands,
comprising approximately 50% of the discounter’s
revenue. Over 2023, we continued to develop a long-term
and mutually beneficial partnership with local suppliers,
enabling us to introduce new SKUs into our offerings.
We strongly believe that DA! is ideally positioned to grow
in today’s challenging environment and will remain a key
growth driver for the Group, being a unique international
format, specially tailored to the needs and desires of
Russian customers.
We consider online shopping a significant catalyst for
transformation in the highly competitive retail sector both
in the way it affects the conventional offline formats and
simultaneously emerging as a promising sales channel in its
own right. The online grocery market in Russia witnessed
another year of rapid growth to reach RUB 918 bn in 2023.
O’KEY’s total online sales rose by 24.0% YoY to RUB 7.7
bn in 2023. We used both our own delivery services and
partner capacities to fulfil almost 3.5 mn online orders
in 2023. By the end of the reporting year, we operated
36 e-commerce pick-up and delivery points at O’KEY
hypermarkets in key cities of pour presence: Moscow, St.
Petersburg, Sochi, and Krasnodar.
Throughout the year, we strived to maintain the high
level of our corporate governance system, which is based
on the principles of professionalism, accountability,
equality, and transparency in compliance with the best
international and Russian practices. In 2023, we again
saw the recognition of our efficient risk management,
strategic oversight, and transparency, coupled with a
well-established operational and financial position, as
Expert RA confirmed our “ruA-” credit rating with a stable
outlook. Later in 2023, NCR credit rating agency awarded
the Company with an “A.ru” rating with a stable outlook,
highly appreciating the Group’s significant geographical
distribution, a diversified supplier base, and the successful
development of the discounter format as a response to
current trends in consumer demand in Russia.
Despite the current market fluctuations, we are dedicated
to actively communicating and accommodating the
interests of all our investors and shareholders. In March
2023, O’KEY GROUP S.A. obtained a listing of its GDRs
on the Astana International Exchange (AIX). This is aimed
to further increase the liquidity of our stock and provide
access to a wider range of individual and institutional
investors. In November 2023, we also changed our GDRs’
listing status on the Moscow Exchange to primary. The
registration of the prospectus and receiving primary
listing status aims to maintain the continuity of trading of
the Group’s GDRs on the Moscow Exchange in order to
sustain the growth of the stock liquidity in the future.
Outlook
Despite the challenges faced by various sectors of the
economy, we recognise that the grocery retail industry
remains highly resilient and is continually sought after by
customers. Additionally, we believe in the Group’s efficient
business approach, which includes two complementary
retail formats and an omnichannel online platform that
addresses the needs of all customer segments. With the
integration of this approach and a proven corporate
governance structure alongside the streamlined
operational management, our ability to maintain a sound
foothold in the market and minimise the impact of any
economic fluctuations is assured.
20 – 21
Annual Report
Overview
Strategic
Report
Operational
Review
Financial
Review Corporate Governance
Financial
Statements 2023
Russia’s Food Retail
Market Overview
The Russian food retail market grew by 13.4%
year-on-year to RUB 22.8 trn in 2023 as compared
to RUB 21.0 trn in 2022, according to Infoline.
By the end of 2023, the overall number of stores
of TOP-200 grocery chains in Russia exceeded
104.0 thousand (plus 12.4 thousand stores YoY), and their
total space comprised 35.9 million m2 (plus 2.6 million
m2 YoY).
According to Infoline, there has been a downsizing trend
in the total average selling space since 2015, by 21.5%
to 304.2 m2, by the end of 2023.
According to Infoline, discounters and proximity
stores continued to increase the footprint in 2023.
The aggregate share of discounters and proximity stores
increased by 2.2 p.p. to 76.6%, while their selling space
increased by 10.5% (by 2.7 million m2) year-on-year
and reached 28.9 million m2 in 2023.
The selling space of hypermarket format stood almost flat
year-on-year and accounted for 5.4 million m2 by the end
of 2023, according to Infoline.
In 2023, the TOP-10 leading food retailers increased their
market share by 2.0 p.p. year-on-year to 40.5%.
O`KEY Group was 10th largest food retailer in Russia
in 2023, according to Infoline.
Top-10 food retailers in Russia (by net retail revenue)
14.6%
10.6%
6.1%
2.3% 1.6% 1.2% 1.2% 1.0% 0.9%
X5 Retail
Group
Magnit Mercury
Retail Group
Lenta Svetofor Auchan Vkusvill Monetka O’KEY
Group
1.0%
METRO
Source: Infoline, revenue net of VAT
Online Grocery Market in Russia
In 2023, according to Infoline, Russian e-grocery market
continued its rapid growth having increased by 47% year-
on-year to RUB 918 bn and reached a 4.0% share in total
Russian food retail market (plus 1.0 p.p. YoY).
1 Infoline research 2023.
In 2023, according to Infoline,
O`KEY Group was ranked
9th largest food retail chain
in online.
RUB
918 bn
Russian e-grocery market value 1
Top-10 grocery retailers in Russia
by Gross Online Sales, RUB bn
Retailer RUB bn
VkusVill 140.0
X5 Group 133.1
Lenta & Utkonos 61.1
Magnit 44.8
METRO (B2C) 41.8
Auchan 26.9
Globus 13.1
Azbuka Vkusa 11.4
O’KEY 8.7
Myasnov 3.9
Source: Infoline research 2023, excluding marketplaces, grocery
aggregators and food delivery operators. Revenue includes VAT
In the course of 2023, marketplaces continued
to outperform the e-grocery market by expanding
the range and increasing the number of sellers to provide
maximum breadth of choice. According to Infoline, leading
marketplaces and food delivery operators increased their
combined market share in e-grocery by 6.3% year-on-year
to 44.5% in 2023 compared to 38.2% in 2022.
Russian e-grocery market structure in 2023, %
Samokat
OZON
Yandex: Lavka & Market
Wildberries
Other
8.3
9.5
10.8
15.9
55.5
Report
Operational
Review
Financial
Review Corporate Governance
Financial
Statements 2023
Russia’s Food Retail
Market Overview
The Russian food retail market grew by 13.4%
year-on-year to RUB 22.8 trn in 2023 as compared
to RUB 21.0 trn in 2022, according to Infoline.
By the end of 2023, the overall number of stores
of TOP-200 grocery chains in Russia exceeded
104.0 thousand (plus 12.4 thousand stores YoY), and their
total space comprised 35.9 million m2 (plus 2.6 million
m2 YoY).
According to Infoline, there has been a downsizing trend
in the total average selling space since 2015, by 21.5%
to 304.2 m2, by the end of 2023.
According to Infoline, discounters and proximity
stores continued to increase the footprint in 2023.
The aggregate share of discounters and proximity stores
increased by 2.2 p.p. to 76.6%, while their selling space
increased by 10.5% (by 2.7 million m2) year-on-year
and reached 28.9 million m2 in 2023.
The selling space of hypermarket format stood almost flat
year-on-year and accounted for 5.4 million m2 by the end
of 2023, according to Infoline.
In 2023, the TOP-10 leading food retailers increased their
market share by 2.0 p.p. year-on-year to 40.5%.
O`KEY Group was 10th largest food retailer in Russia
in 2023, according to Infoline.
Top-10 food retailers in Russia (by net retail revenue)
14.6%
10.6%
6.1%
2.3% 1.6% 1.2% 1.2% 1.0% 0.9%
X5 Retail
Group
Magnit Mercury
Retail Group
Lenta Svetofor Auchan Vkusvill Monetka O’KEY
Group
1.0%
METRO
Source: Infoline, revenue net of VAT
Online Grocery Market in Russia
In 2023, according to Infoline, Russian e-grocery market
continued its rapid growth having increased by 47% year-
on-year to RUB 918 bn and reached a 4.0% share in total
Russian food retail market (plus 1.0 p.p. YoY).
1 Infoline research 2023.
In 2023, according to Infoline,
O`KEY Group was ranked
9th largest food retail chain
in online.
RUB
918 bn
Russian e-grocery market value 1
Top-10 grocery retailers in Russia
by Gross Online Sales, RUB bn
Retailer RUB bn
VkusVill 140.0
X5 Group 133.1
Lenta & Utkonos 61.1
Magnit 44.8
METRO (B2C) 41.8
Auchan 26.9
Globus 13.1
Azbuka Vkusa 11.4
O’KEY 8.7
Myasnov 3.9
Source: Infoline research 2023, excluding marketplaces, grocery
aggregators and food delivery operators. Revenue includes VAT
In the course of 2023, marketplaces continued
to outperform the e-grocery market by expanding
the range and increasing the number of sellers to provide
maximum breadth of choice. According to Infoline, leading
marketplaces and food delivery operators increased their
combined market share in e-grocery by 6.3% year-on-year
to 44.5% in 2023 compared to 38.2% in 2022.
Russian e-grocery market structure in 2023, %
Samokat
OZON
Yandex: Lavka & Market
Wildberries
Other
8.3
9.5
10.8
15.9
55.5
22 – 23
Annual Report
Overview
Strategic
Report
Operational
Review
Financial
Review Corporate Governance
Financial
Statements 2023
Delivering
on our Strategy
O’KEY Group operates two shopping formats, namely hypermarkets
and discounters, and a developed online omnichannel platform.
The strategic priorities depend on the format. However, all formats
are focused on building a tempting value proposition and providing
our customers with the best quality products and superior service.
O’KEY Hypermarkets DA! discounters E-commerce
BUSINESS DEVELOPMENT:
• Carrying on the format development
keeping up with the most innovative
market trends
• Looking for the best opportunities
to expand the business: developing
new enhanced hypermarkets; make
use of the latest technologies
and solutions in retail, supply,
and logistics; extend the network
in high-priority regions and optimise
the store portfolio
• Unlocking the opportunities
for the format’s top- and bottom-
line growth by steadily transforming
and adapting it to meet the diverse
consumer needs
• Raise the operational efficiency
• Expanding to the entire Central Federal
District and the surrounding regions
• Introducing and evolving DA!
discounters as a growth driver
for the Group’s top- and bottom-line
• Focusing on operational effectiveness
and targeted profitability
• Making further advancement
of the omnichannel approach, which
makes it possible to raise sales volumes
by covering all customers segments
and needs
• Developing a partnership
with specialised delivery operators
to seek for operational efficiencies
• Enlarging the range of partners
via collaboration with marketplaces
DELIVERY OF THE BEST VALUE PROPOSITION:
• Offering the most convenient
and up-to-date shopping experience
along with a well-balanced product
assortment with a focus on fresh
and ultra-fresh categories
• Increasing the share of private label
products and own products in total
sales
• Focusing on the “every day low price”
approach
• Offering the most competitive pricing
on the market without compromising
quality
• Taking the lead in developing the PLs
portfolio
• Integrating IT-solutions with partners
to synergise on additional operational
and cost efficiency
• Enhancing the productivity
of e-commerce operations
• Working on express-delivery service
implementation and cost efficiency
BENEFIT FROM SYNERGIES BETWEEN THE FORMATS:
• Developing synergies
with the discounter business in joint
procurement and direct import
of fresh products, as well as benefiting
from the private label insight
• Evolving synergies with e-commerce
by using an omnichannel approach
Benefitting from the increased
number of orders placed through
the website and the mobile app
• Benefitting from joint procurement
of branded assortments
with hypermarkets
• Sharing storage space on O’KEY
distribution centres in the Central
Region for some of DA!’s assortment
• Benefitting from O’KEY hypermarkets
serving as pick-up points
and an omnichannel delivery platform
for online orders
Business model
O’KEY Group has devised a distinctive business model
pivoting around two straightforwardly positioned
and complementary retail formats (hypermarkets
and discounters) and a fast-growing e-commerce platform
with an omnichannel approach. Such a combination
of formats empowers us to meet the needs of various
customer segments and to keep up to date with the most
recent market trends. Within the Group, all formats
are instrumental parts of the business model.
Consequently, such a business approach proved
its efficiency and is fundamental for our prospective
success.
O’KEY hypermarkets
One of the leaders in its segment
with more than 20-year
expertise in the market
enhanced by the innovative store
concept
Sound base for e-commerce
growth
● Among the Russian
retail market leaders,
commanding a substantial
market presence in key Russian
cities
● A modern hypermarket concept
to follow the market tendencies
● A balanced range of goods
with a focus on fresh
and ultra-fresh
● An optimised offer of non-food
products
● Superior customer service
● A modern shopping
environment
● 77 hypermarkets in 23 cities
in 6 federal districts of Russia
● Hypermarkets reformatting
is aimed at bolstering their
market position and supporting
long-term LFL growth
DA! discounters
A discount model unique
for the Russian market and based
on the world’s best practices
tailored to local consumers
● A discount concept with a hinge
on premium
● A fast-developing chain
of stores in the best locations,
offering superior-quality
products at the best possible
prices
● Advanced insight into fresh
supply and own brands
● A pivot on centralisation
and cost efficiency
● Top-of-the-range private label
expertise (own brands account
for about 50% of revenue)
● Every day low price policy, which
is mostly supported by own
brands, offers a 20–30% cost
saving to our customers
● Comfortable and reasonably
spacious layouts and interiors
● 220 stores in 6 regions
of the Central Federal District
of Russia
● +19.8% YoY net retail revenue
growth in 2023
● DA! discounters’ share
in the Group’s net retail revenue
reached 31.0%
● DA! will carry on being a growth
driver for the Group’s top-
and bottom-line in mid-term
E-commerce
A high growth potential
segment meeting rapid changes
in the consumer shopping
patterns
● Boosting e-grocery since 2015
● One of Russia’s Top-10 food
retailers in online
● An omnichannel
approach: a modern
and convenient omnichannel
mobile application and award-
winning online store, a delivery
or pick-up option, a unified
bonus system and product
range across online and retail
channels
● Online orders are processed
by the closest hypermarkets
in Moscow and St. Petersburg
and in partnership with delivery
operators in all cities
of operation
● 36 specially dedicated zones
for online orders fulfilment
in hypermarkets in Moscow,
St.Petersburg, Sochi,
and Krasnodar
● 100% online coverage
in the regions of O’KEY Group’s
presence
● 36 e-commerce points in O’KEY
hypermarkets for online orders
sorting, picking-up and delivery
● +24.0% YoY total online sales
growth in 2023
● Online sales reached 5.4%
of O’KEY Group’s net retail
revenue in 2023
Report
Operational
Review
Financial
Review Corporate Governance
Financial
Statements 2023
Delivering
on our Strategy
O’KEY Group operates two shopping formats, namely hypermarkets
and discounters, and a developed online omnichannel platform.
The strategic priorities depend on the format. However, all formats
are focused on building a tempting value proposition and providing
our customers with the best quality products and superior service.
O’KEY Hypermarkets DA! discounters E-commerce
BUSINESS DEVELOPMENT:
• Carrying on the format development
keeping up with the most innovative
market trends
• Looking for the best opportunities
to expand the business: developing
new enhanced hypermarkets; make
use of the latest technologies
and solutions in retail, supply,
and logistics; extend the network
in high-priority regions and optimise
the store portfolio
• Unlocking the opportunities
for the format’s top- and bottom-
line growth by steadily transforming
and adapting it to meet the diverse
consumer needs
• Raise the operational efficiency
• Expanding to the entire Central Federal
District and the surrounding regions
• Introducing and evolving DA!
discounters as a growth driver
for the Group’s top- and bottom-line
• Focusing on operational effectiveness
and targeted profitability
• Making further advancement
of the omnichannel approach, which
makes it possible to raise sales volumes
by covering all customers segments
and needs
• Developing a partnership
with specialised delivery operators
to seek for operational efficiencies
• Enlarging the range of partners
via collaboration with marketplaces
DELIVERY OF THE BEST VALUE PROPOSITION:
• Offering the most convenient
and up-to-date shopping experience
along with a well-balanced product
assortment with a focus on fresh
and ultra-fresh categories
• Increasing the share of private label
products and own products in total
sales
• Focusing on the “every day low price”
approach
• Offering the most competitive pricing
on the market without compromising
quality
• Taking the lead in developing the PLs
portfolio
• Integrating IT-solutions with partners
to synergise on additional operational
and cost efficiency
• Enhancing the productivity
of e-commerce operations
• Working on express-delivery service
implementation and cost efficiency
BENEFIT FROM SYNERGIES BETWEEN THE FORMATS:
• Developing synergies
with the discounter business in joint
procurement and direct import
of fresh products, as well as benefiting
from the private label insight
• Evolving synergies with e-commerce
by using an omnichannel approach
Benefitting from the increased
number of orders placed through
the website and the mobile app
• Benefitting from joint procurement
of branded assortments
with hypermarkets
• Sharing storage space on O’KEY
distribution centres in the Central
Region for some of DA!’s assortment
• Benefitting from O’KEY hypermarkets
serving as pick-up points
and an omnichannel delivery platform
for online orders
Business model
O’KEY Group has devised a distinctive business model
pivoting around two straightforwardly positioned
and complementary retail formats (hypermarkets
and discounters) and a fast-growing e-commerce platform
with an omnichannel approach. Such a combination
of formats empowers us to meet the needs of various
customer segments and to keep up to date with the most
recent market trends. Within the Group, all formats
are instrumental parts of the business model.
Consequently, such a business approach proved
its efficiency and is fundamental for our prospective
success.
O’KEY hypermarkets
One of the leaders in its segment
with more than 20-year
expertise in the market
enhanced by the innovative store
concept
Sound base for e-commerce
growth
● Among the Russian
retail market leaders,
commanding a substantial
market presence in key Russian
cities
● A modern hypermarket concept
to follow the market tendencies
● A balanced range of goods
with a focus on fresh
and ultra-fresh
● An optimised offer of non-food
products
● Superior customer service
● A modern shopping
environment
● 77 hypermarkets in 23 cities
in 6 federal districts of Russia
● Hypermarkets reformatting
is aimed at bolstering their
market position and supporting
long-term LFL growth
DA! discounters
A discount model unique
for the Russian market and based
on the world’s best practices
tailored to local consumers
● A discount concept with a hinge
on premium
● A fast-developing chain
of stores in the best locations,
offering superior-quality
products at the best possible
prices
● Advanced insight into fresh
supply and own brands
● A pivot on centralisation
and cost efficiency
● Top-of-the-range private label
expertise (own brands account
for about 50% of revenue)
● Every day low price policy, which
is mostly supported by own
brands, offers a 20–30% cost
saving to our customers
● Comfortable and reasonably
spacious layouts and interiors
● 220 stores in 6 regions
of the Central Federal District
of Russia
● +19.8% YoY net retail revenue
growth in 2023
● DA! discounters’ share
in the Group’s net retail revenue
reached 31.0%
● DA! will carry on being a growth
driver for the Group’s top-
and bottom-line in mid-term
E-commerce
A high growth potential
segment meeting rapid changes
in the consumer shopping
patterns
● Boosting e-grocery since 2015
● One of Russia’s Top-10 food
retailers in online
● An omnichannel
approach: a modern
and convenient omnichannel
mobile application and award-
winning online store, a delivery
or pick-up option, a unified
bonus system and product
range across online and retail
channels
● Online orders are processed
by the closest hypermarkets
in Moscow and St. Petersburg
and in partnership with delivery
operators in all cities
of operation
● 36 specially dedicated zones
for online orders fulfilment
in hypermarkets in Moscow,
St.Petersburg, Sochi,
and Krasnodar
● 100% online coverage
in the regions of O’KEY Group’s
presence
● 36 e-commerce points in O’KEY
hypermarkets for online orders
sorting, picking-up and delivery
● +24.0% YoY total online sales
growth in 2023
● Online sales reached 5.4%
of O’KEY Group’s net retail
revenue in 2023
24 – 25
Annual Report
Overview
Strategic
Report
Operational
Review
Financial
Review Corporate Governance
Financial
Statements 2023
Sustainable
Development
Sustainability Approach
O’KEY Group is a retail company that has
established a widespread presence in various regions
of Russia. Since its inception, the Company has been
catering to a diverse array of stakeholders, including
customers, employees, shareholders, investors, suppliers,
and local community representatives. As a company,
we consistently develop strategies for engaging
with regulatory and government authorities, the media,
and NGOs, as we believe that fostering partnerships
is essential for the continuous growth and development
of our business as a whole. Our commitment to sustainable
development is embedded in our core values. We strive
for excellence in our daily operations by providing
families with fresh and high-quality products, along
with a convenient and hassle-free shopping experience.
accordingly. We believe that businesses have a crucial
role to play in society and we strive to make a positive
impact through our operations. We are committed
to sustainable development and we take steps
to minimise our environmental impact. We also believe
that it is important to give back to the community,
and hence we support various charitable initiatives
and organisations that align with our values.
Overall, we remain committed to delivering the best
possible experience to our customers, employees,
shareholders, investors, suppliers, and local community
representatives. We believe that by continuing
to prioritise sustainability and innovation, we can
continue to grow and develop our business
in a responsible way.
Benefits for Our Key
Stakeholders
Investors and Shareholders
In 2023, we continued to develop both modern
O’KEY hypermarkets, fast-growing DA! discounters
and e-commerce platform. We are committed
to maintaining our focus on creating value
for shareholders, prioritising loyalty and convenience
for our customers, and ensuring rigorous capital
discipline. O’KEY Group has been listed on the London
Stock Exchange since 2010.
In March 2023, O`KEY Group’s GDRs received a secondary
listing in the main market on the Astana International
Exchange. We expect that the listing of O’KEY Group’s
GDRs on Astana International Exchange will provide
access to the capital to a wider range of investors and will
allow us to share our sustainable and long-term success
with the shareholders.
In November 2023, the Group also completed
the procedure for changing its listing status
on the Moscow Exchange (MOEX) to primary. Earlier,
in December 2020, the Group received a secondary
listing of its depositary receipts on MOEX. The Company’s
GDRs were included in Tier 1 quotation list, and have been
traded on the main market ever since. The registration
of the securities prospectus and the Company’s
acquisition of primary listing status in 2023 are aimed
at ensuring the continuity of trading of the Group’s GDRs
on the Moscow Exchange in the future.
Customers and local communities
O’KEY Group is providing high-quality products
at competitive prices under own brands. Our precise
product selection is aimed to ensure that our customers
receive the best value. As we expand, we remain
committed to reinvesting in our competitiveness to offer
the best prices to our customers while maintaining
the highest standards of quality. We are also a socially
responsible company, spearheading campaigns to support
low-income members of the public, and children
with disabilities, and raise consumer awareness
for vulnerable groups. Our goal is to make a positive
impact on the communities we serve and create a better
future for all.
Suppliers
O’KEY Group sources more than 80% of its products
from local suppliers based in Russia. This strategy enables
us to maintain a stable supply of essential products.
We prioritise supporting local enterprises and innovative
manufacturers throughout all regions where we operate.
Additionally, the Group is an active participant in various
regional and national quality initiatives, particularly
in the South and Central regions of Russia.
RUB
244.1 mn
proceeds from sales of recyclable
materials in 2023
19,230
number of Group employees
RUB
407 mn
employees’ social benefits in 2023
Recognising the significance of socially responsible
businesses, we endeavour to create customised
methods, incorporate global standards of accountability
and community assistance, and adhere to regulations
regarding labour relations and environmental safety.
At O’KEY Group, we prioritise creating an effective
and positive work environment for our employees.
We believe that our employees are the backbone of our
business, and we are committed to ensuring their well-
being and career growth. We provide our employees
with opportunities to develop their skills and knowledge
through training and development programmes,
and we strive to create a culture of innovation
and collaboration.
In addition to our commitment to our employees,
we take our social responsibility seriously by acting
Report
Operational
Review
Financial
Review Corporate Governance
Financial
Statements 2023
Sustainable
Development
Sustainability Approach
O’KEY Group is a retail company that has
established a widespread presence in various regions
of Russia. Since its inception, the Company has been
catering to a diverse array of stakeholders, including
customers, employees, shareholders, investors, suppliers,
and local community representatives. As a company,
we consistently develop strategies for engaging
with regulatory and government authorities, the media,
and NGOs, as we believe that fostering partnerships
is essential for the continuous growth and development
of our business as a whole. Our commitment to sustainable
development is embedded in our core values. We strive
for excellence in our daily operations by providing
families with fresh and high-quality products, along
with a convenient and hassle-free shopping experience.
accordingly. We believe that businesses have a crucial
role to play in society and we strive to make a positive
impact through our operations. We are committed
to sustainable development and we take steps
to minimise our environmental impact. We also believe
that it is important to give back to the community,
and hence we support various charitable initiatives
and organisations that align with our values.
Overall, we remain committed to delivering the best
possible experience to our customers, employees,
shareholders, investors, suppliers, and local community
representatives. We believe that by continuing
to prioritise sustainability and innovation, we can
continue to grow and develop our business
in a responsible way.
Benefits for Our Key
Stakeholders
Investors and Shareholders
In 2023, we continued to develop both modern
O’KEY hypermarkets, fast-growing DA! discounters
and e-commerce platform. We are committed
to maintaining our focus on creating value
for shareholders, prioritising loyalty and convenience
for our customers, and ensuring rigorous capital
discipline. O’KEY Group has been listed on the London
Stock Exchange since 2010.
In March 2023, O`KEY Group’s GDRs received a secondary
listing in the main market on the Astana International
Exchange. We expect that the listing of O’KEY Group’s
GDRs on Astana International Exchange will provide
access to the capital to a wider range of investors and will
allow us to share our sustainable and long-term success
with the shareholders.
In November 2023, the Group also completed
the procedure for changing its listing status
on the Moscow Exchange (MOEX) to primary. Earlier,
in December 2020, the Group received a secondary
listing of its depositary receipts on MOEX. The Company’s
GDRs were included in Tier 1 quotation list, and have been
traded on the main market ever since. The registration
of the securities prospectus and the Company’s
acquisition of primary listing status in 2023 are aimed
at ensuring the continuity of trading of the Group’s GDRs
on the Moscow Exchange in the future.
Customers and local communities
O’KEY Group is providing high-quality products
at competitive prices under own brands. Our precise
product selection is aimed to ensure that our customers
receive the best value. As we expand, we remain
committed to reinvesting in our competitiveness to offer
the best prices to our customers while maintaining
the highest standards of quality. We are also a socially
responsible company, spearheading campaigns to support
low-income members of the public, and children
with disabilities, and raise consumer awareness
for vulnerable groups. Our goal is to make a positive
impact on the communities we serve and create a better
future for all.
Suppliers
O’KEY Group sources more than 80% of its products
from local suppliers based in Russia. This strategy enables
us to maintain a stable supply of essential products.
We prioritise supporting local enterprises and innovative
manufacturers throughout all regions where we operate.
Additionally, the Group is an active participant in various
regional and national quality initiatives, particularly
in the South and Central regions of Russia.
RUB
244.1 mn
proceeds from sales of recyclable
materials in 2023
19,230
number of Group employees
RUB
407 mn
employees’ social benefits in 2023
Recognising the significance of socially responsible
businesses, we endeavour to create customised
methods, incorporate global standards of accountability
and community assistance, and adhere to regulations
regarding labour relations and environmental safety.
At O’KEY Group, we prioritise creating an effective
and positive work environment for our employees.
We believe that our employees are the backbone of our
business, and we are committed to ensuring their well-
being and career growth. We provide our employees
with opportunities to develop their skills and knowledge
through training and development programmes,
and we strive to create a culture of innovation
and collaboration.
In addition to our commitment to our employees,
we take our social responsibility seriously by acting
26 – 27
Annual Report
Overview
Strategic
Report
Operational
Review
Financial
Review Corporate Governance
Financial
Statements 2023
To further streamline our operations, we have
implemented a unified method of processing
and approving direct import supplies. We optimise
costs, which allows us to invest these cost savings
in enhancing our supply chain and improving the quality
of our products. By continuing to work closely with local
suppliers and regulatory bodies, we are confident in our
ability to maintain high standards of quality and efficiency
in all our operations.
O’KEY Group’s mission is to develop and maintain sound
relationships with local suppliers and producers. This
partnership ensures that we offer our customers a wide
range of high-quality products in important categories
such as poultry meat, dairy products, sausages, bakery
goods, and confectionery. To further enhance our
product assortment, we have added unique local products
with exceptional quality and organoleptic properties.
In order to achieve this, we conduct specialised trading
and purchasing sessions in all the cities we operate
in, which allows us to set up direct communication
and interaction with potential suppliers. We take great
care in selecting our partner suppliers, and our main
criteria include the quality of production facilities, a well-
implemented quality control system, and the highest
quality characteristics of the products. Our focus on these
criteria ensures a steady supply of high-quality products
for our customers, which in turn promotes a mutually
beneficial partnership with our suppliers and local
producers.
Employees
The experience and expertise of our employees
are fundamental components of our business model,
and we believe that they are the backbone of our
success. For this reason, we invest in our employees’
personal and professional growth and provide them
with ample opportunities to develop their skills
and knowledge so that they can continue to provide
exceptional customer service to both internal and external
customers. We want to ensure that every employee
in our business understands the crucial role they play
in creating a positive and welcoming environment
for our customers. By doing this, we believe that we can
create a strong service culture that is not just beneficial
for our customers but also for our employees’ job
satisfaction and overall well-being.
Our Employees
O’KEY Group’s HR policy is poised to steadily improve
onboarding, learning, development, and acknowledgement
of the Company’s employees. We aspire to create a productive
work environment and empower professional and personal
potential in accordance with the Company’s HR strategy. Systems-
level and holistic HR management and sensitivity to people
and their needs make O’KEY Group an attractive employer.
O’KEY Group’s HR strategy pillars are:
● creating a culture of engagement and effectiveness;
● creating an environment for development
and an effective work environment;
● introducing modern technologies and automating HR
services;
● building an effective organisational structure
and management team;
● building a positive employer brand in the Russian
labour market;
● applying a systematic approach to attract, retain
and develop personnel; and
● introducing the best HR practices.
Major HR and staff management
events in 2023:
● Successful staff development helped the Company
amid labour market restructuring and increasing
competition for top talent. We used the most
efficacious recruitment sources: referral
programme “Bring a friend”, the websites
of Headhunter and Avito.
● More in-depth and automated HR analytics. Regular
HR reporting has been transferred to the Power BI
platform, which allows prompt access to information,
increases the speed and quality of decisions made.
● A mentoring system was developed for working not
only with new employees in the format of classical
mentoring, but also with existing ones aimed
at horizontal or vertical development in the mentoring
format.
● We completed implementation of automated trainings
for managers to learn occupational health and safety
(OHS) disciplines.
● The Company provided OHS procedures as part of HR
practices;
● To improve safety, we continue
to implement e-workplace — Occupational Health
and Safety Control System (OHSCS).
● The page designs on the corporate website,
as well as on the Headhunter and Avito websites were
updated.
In 2024, we will focus
on developing an effective
work environment, developing
employee potential
and increasing productivity,
protecting the health of our
employees and strengthening
the employer brand. In 2024,
we will address:
● Development of a corporate culture that supports
the implementation of the Company’s strategy;
● Formation of an effective management team;
● Increase of the attractiveness of the employer’s brand;
and
● Creation of an effective work environment
by automating HR processes and increase
of the availability of HR services for our employees.
Report
Operational
Review
Financial
Review Corporate Governance
Financial
Statements 2023
To further streamline our operations, we have
implemented a unified method of processing
and approving direct import supplies. We optimise
costs, which allows us to invest these cost savings
in enhancing our supply chain and improving the quality
of our products. By continuing to work closely with local
suppliers and regulatory bodies, we are confident in our
ability to maintain high standards of quality and efficiency
in all our operations.
O’KEY Group’s mission is to develop and maintain sound
relationships with local suppliers and producers. This
partnership ensures that we offer our customers a wide
range of high-quality products in important categories
such as poultry meat, dairy products, sausages, bakery
goods, and confectionery. To further enhance our
product assortment, we have added unique local products
with exceptional quality and organoleptic properties.
In order to achieve this, we conduct specialised trading
and purchasing sessions in all the cities we operate
in, which allows us to set up direct communication
and interaction with potential suppliers. We take great
care in selecting our partner suppliers, and our main
criteria include the quality of production facilities, a well-
implemented quality control system, and the highest
quality characteristics of the products. Our focus on these
criteria ensures a steady supply of high-quality products
for our customers, which in turn promotes a mutually
beneficial partnership with our suppliers and local
producers.
Employees
The experience and expertise of our employees
are fundamental components of our business model,
and we believe that they are the backbone of our
success. For this reason, we invest in our employees’
personal and professional growth and provide them
with ample opportunities to develop their skills
and knowledge so that they can continue to provide
exceptional customer service to both internal and external
customers. We want to ensure that every employee
in our business understands the crucial role they play
in creating a positive and welcoming environment
for our customers. By doing this, we believe that we can
create a strong service culture that is not just beneficial
for our customers but also for our employees’ job
satisfaction and overall well-being.
Our Employees
O’KEY Group’s HR policy is poised to steadily improve
onboarding, learning, development, and acknowledgement
of the Company’s employees. We aspire to create a productive
work environment and empower professional and personal
potential in accordance with the Company’s HR strategy. Systems-
level and holistic HR management and sensitivity to people
and their needs make O’KEY Group an attractive employer.
O’KEY Group’s HR strategy pillars are:
● creating a culture of engagement and effectiveness;
● creating an environment for development
and an effective work environment;
● introducing modern technologies and automating HR
services;
● building an effective organisational structure
and management team;
● building a positive employer brand in the Russian
labour market;
● applying a systematic approach to attract, retain
and develop personnel; and
● introducing the best HR practices.
Major HR and staff management
events in 2023:
● Successful staff development helped the Company
amid labour market restructuring and increasing
competition for top talent. We used the most
efficacious recruitment sources: referral
programme “Bring a friend”, the websites
of Headhunter and Avito.
● More in-depth and automated HR analytics. Regular
HR reporting has been transferred to the Power BI
platform, which allows prompt access to information,
increases the speed and quality of decisions made.
● A mentoring system was developed for working not
only with new employees in the format of classical
mentoring, but also with existing ones aimed
at horizontal or vertical development in the mentoring
format.
● We completed implementation of automated trainings
for managers to learn occupational health and safety
(OHS) disciplines.
● The Company provided OHS procedures as part of HR
practices;
● To improve safety, we continue
to implement e-workplace — Occupational Health
and Safety Control System (OHSCS).
● The page designs on the corporate website,
as well as on the Headhunter and Avito websites were
updated.
In 2024, we will focus
on developing an effective
work environment, developing
employee potential
and increasing productivity,
protecting the health of our
employees and strengthening
the employer brand. In 2024,
we will address:
● Development of a corporate culture that supports
the implementation of the Company’s strategy;
● Formation of an effective management team;
● Increase of the attractiveness of the employer’s brand;
and
● Creation of an effective work environment
by automating HR processes and increase
of the availability of HR services for our employees.
28 – 29
Annual Report
Overview
Strategic
Report
Operational
Review
Financial
Review Corporate Governance
Financial
Statements 2023
Key indicators
Below are O’KEY Group’s key personnel metrics.
19,230
Number of employees
(as of 31 December 2023)
Gender distribution, %
Female Male
71
29
Age distribution, %
18–25
26–35
36–45
46–55
56+
10
11
22
25
32
Staff training and development
The Company’s success hinges on its people.
In the reporting year, we proceeded with the personal
and professional growth of our employees.
2023 staff training and development highlights:
● Over 111,000 e-learning courses were completed
by our employees;
● About 2,000 trainings and educational webinars were
conducted; and
● 25 educational products were created
for the development of hard and soft skills.
Talent Pool Academy
Over the year of 2023, O’KEY Group continued to develop
its new Talent Pool Academy.
In addition to the Academy’s three existing faculties:
store department head faculty “ROST’OK” for linear
management positions, deputy hypermarket
director “Leadership School” faculty for middle
management positions, and store manager faculty “School
with Meaning” for the hypermarket director position:
● A new faculty “School of Mentors” was launched,
forming a culture of mentoring and continuous
improvement of the training and development system
in the Company;
● As of the end of 2023, 288 employees were studying
at the Academy;
● As of the end of 2023, 165 students of the Academy
were appointed to the following positions: head
of hypermarket department, deputy director
of hypermarket, and director of hypermarket; and
● About 18% of appointments to senior positions were
made from the internal personnel reserve.
● 6,050 employees participated in offline trainings
● 4,800 employees participated in webinars
● 117 available courses at the O’KEY Academy
● 111,000 completed e-courses
Staff retention and motivation
O’KEY Group provides social support to its employees
in accordance with legal requirements and implements
additional programmes aimed at creating the most
comfortable conditions for them, among them:
● VMI on the terms of co-financing (payment
by the Company in the amount of up to 80%);
● discounts in the Group ‘s stores and a cumulative
employee points system;
● payment of meals for employees of individual
departments;
● gifts for employees’ children on New Year ‘s holidays;
● financial assistance to employees who find themselves
in a difficult life situation; and
● instalment payment for membership in fitness clubs.
In 2023, the Group additionally implemented:
● motivational payments for work experience of more
than 10, 15, and 20 years;
● a wide corporate loyalty programme with offers
from partners.
In 2023, the Company’s social benefits expenses,
including payment for VMI, children’s New Year holidays,
financial assistance, and lunch payments, amounted
to RUB 407 million. Employees of the Group receive
shopping benefits in all stores of the Company.
In 2023, we maintained the set of services and the quality
level of the corporate VMI system at the usual high level.
In addition, the Company expanded the list of grounds
for providing financial assistance to our employees.
To retain the best specialists, the Company effectively
uses a combination of financial and non-financial
employee motivation systems, and also strives
to guarantee a competitive salary level. The Company
applies a KPI system that takes into account both
individual and corporate goals.
In order to increase the Company’s competitiveness
in the labour market, in 2023, a large-scale revision
of remuneration and motivation systems was carried out
in accordance with the current external environment
and the internal values of the Company. Bonus
systems for operating units were updated. Within
the framework of the current bonus programme to ensure
the achievement of the specified financial results,
as well as to increase operational efficiency, in accordance
with the financial development plan of the Company,
the list of target KPIs was updated.
In 2024, we plan to maintain the existing benefits
and expand the list of partner programmes for our
employees.
Reporting violations
The Group’s employees feel free to call the compliance
hotline or use other feedback channels to make good-faith
reports of violations.
O’KEY Group is focused on resolving ethics and labour law
violations as well as cases of misunderstanding between
employees and the management. Since 2019, the Company
has had a Whistleblowing Policy in place.
We operate several whistleblowing channels: a call centre,
dedicated manager-employee meeting hours, and morning
meetings.
116
reports received in 2023 compared
to 189 in 2022
100 %
of reports addressed and followed
up by feedback
Increasing the attractiveness
of the Company’s HR brand
In 2023, the Company paid special attention to attracting
and retaining personnel, and, among other things,
changed the approach to working with young professional
candidates.
As part of our work with students in 2023,
the following initiatives were implemented:
● some of the Company’s stores have become a platform
for the practical training of college and university
students in the professions of cook, baker and food
technologists;
● a campaign was held to attract students to pre-
graduate practice and summer season work
at the Company’s facilities;
● the head office and distribution centre in Moscow
became a platform for the practical training
of students of the Russian Academy of National
Economy and Public Administration under
the President of the Russian Federation, studying
finance, commerce and logistics; and
● O’KEY employees took part in lectures and open days
at colleges and universities.
In 2023, the design of the Company’s page on the key
recruitment sites — Headhunter and Avito,
as well as VKontakte community “Career at O’KEY” were
updated in line with the Company’s current positioning
in the labour market.
Report
Operational
Review
Financial
Review Corporate Governance
Financial
Statements 2023
Key indicators
Below are O’KEY Group’s key personnel metrics.
19,230
Number of employees
(as of 31 December 2023)
Gender distribution, %
Female Male
71
29
Age distribution, %
18–25
26–35
36–45
46–55
56+
10
11
22
25
32
Staff training and development
The Company’s success hinges on its people.
In the reporting year, we proceeded with the personal
and professional growth of our employees.
2023 staff training and development highlights:
● Over 111,000 e-learning courses were completed
by our employees;
● About 2,000 trainings and educational webinars were
conducted; and
● 25 educational products were created
for the development of hard and soft skills.
Talent Pool Academy
Over the year of 2023, O’KEY Group continued to develop
its new Talent Pool Academy.
In addition to the Academy’s three existing faculties:
store department head faculty “ROST’OK” for linear
management positions, deputy hypermarket
director “Leadership School” faculty for middle
management positions, and store manager faculty “School
with Meaning” for the hypermarket director position:
● A new faculty “School of Mentors” was launched,
forming a culture of mentoring and continuous
improvement of the training and development system
in the Company;
● As of the end of 2023, 288 employees were studying
at the Academy;
● As of the end of 2023, 165 students of the Academy
were appointed to the following positions: head
of hypermarket department, deputy director
of hypermarket, and director of hypermarket; and
● About 18% of appointments to senior positions were
made from the internal personnel reserve.
● 6,050 employees participated in offline trainings
● 4,800 employees participated in webinars
● 117 available courses at the O’KEY Academy
● 111,000 completed e-courses
Staff retention and motivation
O’KEY Group provides social support to its employees
in accordance with legal requirements and implements
additional programmes aimed at creating the most
comfortable conditions for them, among them:
● VMI on the terms of co-financing (payment
by the Company in the amount of up to 80%);
● discounts in the Group ‘s stores and a cumulative
employee points system;
● payment of meals for employees of individual
departments;
● gifts for employees’ children on New Year ‘s holidays;
● financial assistance to employees who find themselves
in a difficult life situation; and
● instalment payment for membership in fitness clubs.
In 2023, the Group additionally implemented:
● motivational payments for work experience of more
than 10, 15, and 20 years;
● a wide corporate loyalty programme with offers
from partners.
In 2023, the Company’s social benefits expenses,
including payment for VMI, children’s New Year holidays,
financial assistance, and lunch payments, amounted
to RUB 407 million. Employees of the Group receive
shopping benefits in all stores of the Company.
In 2023, we maintained the set of services and the quality
level of the corporate VMI system at the usual high level.
In addition, the Company expanded the list of grounds
for providing financial assistance to our employees.
To retain the best specialists, the Company effectively
uses a combination of financial and non-financial
employee motivation systems, and also strives
to guarantee a competitive salary level. The Company
applies a KPI system that takes into account both
individual and corporate goals.
In order to increase the Company’s competitiveness
in the labour market, in 2023, a large-scale revision
of remuneration and motivation systems was carried out
in accordance with the current external environment
and the internal values of the Company. Bonus
systems for operating units were updated. Within
the framework of the current bonus programme to ensure
the achievement of the specified financial results,
as well as to increase operational efficiency, in accordance
with the financial development plan of the Company,
the list of target KPIs was updated.
In 2024, we plan to maintain the existing benefits
and expand the list of partner programmes for our
employees.
Reporting violations
The Group’s employees feel free to call the compliance
hotline or use other feedback channels to make good-faith
reports of violations.
O’KEY Group is focused on resolving ethics and labour law
violations as well as cases of misunderstanding between
employees and the management. Since 2019, the Company
has had a Whistleblowing Policy in place.
We operate several whistleblowing channels: a call centre,
dedicated manager-employee meeting hours, and morning
meetings.
116
reports received in 2023 compared
to 189 in 2022
100 %
of reports addressed and followed
up by feedback
Increasing the attractiveness
of the Company’s HR brand
In 2023, the Company paid special attention to attracting
and retaining personnel, and, among other things,
changed the approach to working with young professional
candidates.
As part of our work with students in 2023,
the following initiatives were implemented:
● some of the Company’s stores have become a platform
for the practical training of college and university
students in the professions of cook, baker and food
technologists;
● a campaign was held to attract students to pre-
graduate practice and summer season work
at the Company’s facilities;
● the head office and distribution centre in Moscow
became a platform for the practical training
of students of the Russian Academy of National
Economy and Public Administration under
the President of the Russian Federation, studying
finance, commerce and logistics; and
● O’KEY employees took part in lectures and open days
at colleges and universities.
In 2023, the design of the Company’s page on the key
recruitment sites — Headhunter and Avito,
as well as VKontakte community “Career at O’KEY” were
updated in line with the Company’s current positioning
in the labour market.
30 – 31
Annual Report
Overview
Strategic
Report
Operational
Review
Financial
Review Corporate Governance
Financial
Statements 2023
Health and Safety
O’KEY Group is committed to reducing work-
related hazards as well as providing safe workplace
and comfortable customer experience.
We strive to minimise injuries at all our facilities
and constantly improve our occupational health and safety
(OHS) management system. The Group’s approach hinges
on full compliance with Russian laws.
Our core regulatory documents in this field are:
● The Labour Protection and Occupational Health,
Environmental, Industrial and Fire Safety Policy, and
● The Occupational Safety Management System.
We track and rigorously investigate all occupational
injuries that involve our employees and customers.
In 2023, the total number of accidents
in the Company was 49, including:
● 47 minor injuries (the investigation classified 9 of them
as non-occupational); and
● 2 severe injuries (the investigation classified 1 of them
as non-occupational).
Most common causes in 2023:
● negligence and haste
● violated OHS requirements;
● ill health; and
● Insufficient control by the immediate supervisor.
The Company also monitors and investigates all customer
and contractor incidents. We updated related procedures
to receive earlier warnings and prevent similar incidents
going forward. Total number of incidents involving
O’KEY Group’s employees, customers, and third-party
organisations went down by 283% year-on-year in 2023.
The decrease was led mainly by advanced approaches
to monitoring working conditions and health, identifying
causes during the investigation, training employees
in workplace safety, as well as taking preventive measures
by the Company.
Supporting inspections of governmental
supervisory authorities
Indicator 2021 2022 2023
Number of supported
inspections
7 6 12
Number of violations 2 2 1
Including OHS violations 1 1 1
Indicator 2021 2022 2023
Penalties (RUB) 362,000 210,000 18,000
Including OHS penalties
(RUB)
130,000 50,000 0
Number of occupational injuries
2023 2022 2021
49
42
53
Number of incidents
O'KEY Group
employees
Third-party
employees
Customers
173
106
105
44
41
40
163
146
67
2021 2022 2023
We regularly audit occupational
health and safety in our stores
and distribution centres
for compliance with Russian
health and safety laws. In 2023,
governmental supervisory
authorities (conducted off-site
inspections of Group stores.
monitoring
the workplace
monitoring
employee
health
training
employees
in workplace
safety
investigating
injuries
taking
preventive
measures
support-
ing labour
inspections
conducted
by governmen-
tal supervisory
authorities.
2023 highlights
Dedicated
assessment
of working
conditions
and occupational
risks in every
workplace
A total of
49
accidents
40 of them
occupational injuries
(including 1 severe
one)
0
fatalities
Report
Operational
Review
Financial
Review Corporate Governance
Financial
Statements 2023
Health and Safety
O’KEY Group is committed to reducing work-
related hazards as well as providing safe workplace
and comfortable customer experience.
We strive to minimise injuries at all our facilities
and constantly improve our occupational health and safety
(OHS) management system. The Group’s approach hinges
on full compliance with Russian laws.
Our core regulatory documents in this field are:
● The Labour Protection and Occupational Health,
Environmental, Industrial and Fire Safety Policy, and
● The Occupational Safety Management System.
We track and rigorously investigate all occupational
injuries that involve our employees and customers.
In 2023, the total number of accidents
in the Company was 49, including:
● 47 minor injuries (the investigation classified 9 of them
as non-occupational); and
● 2 severe injuries (the investigation classified 1 of them
as non-occupational).
Most common causes in 2023:
● negligence and haste
● violated OHS requirements;
● ill health; and
● Insufficient control by the immediate supervisor.
The Company also monitors and investigates all customer
and contractor incidents. We updated related procedures
to receive earlier warnings and prevent similar incidents
going forward. Total number of incidents involving
O’KEY Group’s employees, customers, and third-party
organisations went down by 283% year-on-year in 2023.
The decrease was led mainly by advanced approaches
to monitoring working conditions and health, identifying
causes during the investigation, training employees
in workplace safety, as well as taking preventive measures
by the Company.
Supporting inspections of governmental
supervisory authorities
Indicator 2021 2022 2023
Number of supported
inspections
7 6 12
Number of violations 2 2 1
Including OHS violations 1 1 1
Indicator 2021 2022 2023
Penalties (RUB) 362,000 210,000 18,000
Including OHS penalties
(RUB)
130,000 50,000 0
Number of occupational injuries
2023 2022 2021
49
42
53
Number of incidents
O'KEY Group
employees
Third-party
employees
Customers
173
106
105
44
41
40
163
146
67
2021 2022 2023
We regularly audit occupational
health and safety in our stores
and distribution centres
for compliance with Russian
health and safety laws. In 2023,
governmental supervisory
authorities (conducted off-site
inspections of Group stores.
monitoring
the workplace
monitoring
employee
health
training
employees
in workplace
safety
investigating
injuries
taking
preventive
measures
support-
ing labour
inspections
conducted
by governmen-
tal supervisory
authorities.
2023 highlights
Dedicated
assessment
of working
conditions
and occupational
risks in every
workplace
A total of
49
accidents
40 of them
occupational injuries
(including 1 severe
one)
0
fatalities
32 – 33
Annual Report
Overview
Strategic
Report
Operational
Review
Financial
Review Corporate Governance
Financial
Statements 2023
805
employees trained
in occupational
health and safety
in a licensed training
centre
586
employees trained
in fire safety
in a licensed training
centre
790
employees trained
in a licensed
training centre
in first aid in case
of occupational
injuries
Anti-Corruption
O’KEY Group remains committed to honesty, openness, and integrity.
The Group’s ever-improving anti-corruption system combines
organisational, economic, legal, and informational measures. We have
zero tolerance to corruption: the Company and all of its employees
must comply with the relevant laws and ethical business practices.
The anti-corruption policy enshrines applicable law
enforcement procedures as per Federal Law No. 273-
FZ “On Combating Corruption”. Adhering to our
rules and policies, we audited various focus areas
of the Company in the reporting year. We investigated
every report received from our employees or partners,
identified the causes, developed corrective measures,
or undertook actions.
In addition, the Company operates various risk
management and business data privacy tools to avoid
breaking the law and incurring financial and reputational
losses. We use a dedicated Red Flag Report system
in which we can track and identify unlawful affiliation
as well as any anomalies or violations of the Company’s
anti-corruption policy. Thanks to this tool, we can respond
to confirmed corruption cases much faster.
Over the course of 2023, we proceeded
with the procurement transparency methods developed
in 2021. Our Anti-Corruption Department regularly
analyses purchases in chain stores using loyalty
programmes to identify internal and external fraud
based on partner reports prepared in accordance
with the Company’s requirements, as well as monitors
the commercial procurements and electronic bidding
on CisLin and Tender.pro e-commerce platforms. Thus,
we rule out possible fake competition for counterparties
taking part in the bidding.
In the reporting year, we also undertook routine measures
to instil confidence of employees and contractors.
The Company actively joined general meetings
and negotiations with suppliers to promote a culture
of zero tolerance to corruption in any form.
The Group has an ever-improving anti-corruption
portal in line with the strategy to simplify and expedite
investigations related to anonymous warnings, disputes,
or legal requests.
In 2023, the ultra-fresh (meat/fish) commercial
procurements were finally moved to an automated trading
platform. We also automated the analysis of in-store
purchases under the loyalty programmes for internal
and external fraud.
The Company aspires to partner with those
counterparties who follow the principles of legality
and anti-corruption laws. Every contract
with a counterparty includes a binding anti-corruption
clause; otherwise, it will not be negotiated.
The Company consistently trains its employees in anti-
corruption, advocating zero tolerance in accordance
with the Company’s Anti-Corruption Policy. To ensure
transparency, employees of the Economic Security
Department regularly join procurement commissions. All
potential conflicts of interest are reported to the internal
audit and security departments of hypermarkets
and supermarkets which assess corruption risks.
All employees of O’KEY Group can go through
the anti-corruption policy and relevant procedures
when being hired. If specific procedures change,
new versions of documents are sent to employees
for review. The Company’s staff undertakes to respond
to all corruption cases without delay. We guarantee
confidentiality of the person who reports corruption.
Anonymous hotline numbers are available to all employees
and suppliers in every branch and on the Group’s website.
Information posters about
zero-tolerance behaviour in our
offices remind employees
to report any suspicious actions
or incidents to the relevant
hotline.
Dedicated assessment
of working conditions
and occupational risks took
place throughout O’KEY Group.
O’KEY Group’s plans in 2024:
● to beef up the OHS management system;
● to make a dedicated assessment of working conditions
and occupational risks in new workplaces;
● to re-evaluate professional risks;
● to proceed with workplace safety and first aid
trainings;
● to implement the Occupational Health and Safety
Control System, an automated toolkit for our
OHS management system efficacy. It helps to plan,
establish responsibility, identify resources, take
measures and analyse the entire occupational health
and safety management system; and
● to strengthen safety measures for high-risk work
performed by the Company’s employees and third-
party organisations.
Report
Operational
Review
Financial
Review Corporate Governance
Financial
Statements 2023
805
employees trained
in occupational
health and safety
in a licensed training
centre
586
employees trained
in fire safety
in a licensed training
centre
790
employees trained
in a licensed
training centre
in first aid in case
of occupational
injuries
Anti-Corruption
O’KEY Group remains committed to honesty, openness, and integrity.
The Group’s ever-improving anti-corruption system combines
organisational, economic, legal, and informational measures. We have
zero tolerance to corruption: the Company and all of its employees
must comply with the relevant laws and ethical business practices.
The anti-corruption policy enshrines applicable law
enforcement procedures as per Federal Law No. 273-
FZ “On Combating Corruption”. Adhering to our
rules and policies, we audited various focus areas
of the Company in the reporting year. We investigated
every report received from our employees or partners,
identified the causes, developed corrective measures,
or undertook actions.
In addition, the Company operates various risk
management and business data privacy tools to avoid
breaking the law and incurring financial and reputational
losses. We use a dedicated Red Flag Report system
in which we can track and identify unlawful affiliation
as well as any anomalies or violations of the Company’s
anti-corruption policy. Thanks to this tool, we can respond
to confirmed corruption cases much faster.
Over the course of 2023, we proceeded
with the procurement transparency methods developed
in 2021. Our Anti-Corruption Department regularly
analyses purchases in chain stores using loyalty
programmes to identify internal and external fraud
based on partner reports prepared in accordance
with the Company’s requirements, as well as monitors
the commercial procurements and electronic bidding
on CisLin and Tender.pro e-commerce platforms. Thus,
we rule out possible fake competition for counterparties
taking part in the bidding.
In the reporting year, we also undertook routine measures
to instil confidence of employees and contractors.
The Company actively joined general meetings
and negotiations with suppliers to promote a culture
of zero tolerance to corruption in any form.
The Group has an ever-improving anti-corruption
portal in line with the strategy to simplify and expedite
investigations related to anonymous warnings, disputes,
or legal requests.
In 2023, the ultra-fresh (meat/fish) commercial
procurements were finally moved to an automated trading
platform. We also automated the analysis of in-store
purchases under the loyalty programmes for internal
and external fraud.
The Company aspires to partner with those
counterparties who follow the principles of legality
and anti-corruption laws. Every contract
with a counterparty includes a binding anti-corruption
clause; otherwise, it will not be negotiated.
The Company consistently trains its employees in anti-
corruption, advocating zero tolerance in accordance
with the Company’s Anti-Corruption Policy. To ensure
transparency, employees of the Economic Security
Department regularly join procurement commissions. All
potential conflicts of interest are reported to the internal
audit and security departments of hypermarkets
and supermarkets which assess corruption risks.
All employees of O’KEY Group can go through
the anti-corruption policy and relevant procedures
when being hired. If specific procedures change,
new versions of documents are sent to employees
for review. The Company’s staff undertakes to respond
to all corruption cases without delay. We guarantee
confidentiality of the person who reports corruption.
Anonymous hotline numbers are available to all employees
and suppliers in every branch and on the Group’s website.
Information posters about
zero-tolerance behaviour in our
offices remind employees
to report any suspicious actions
or incidents to the relevant
hotline.
Dedicated assessment
of working conditions
and occupational risks took
place throughout O’KEY Group.
O’KEY Group’s plans in 2024:
● to beef up the OHS management system;
● to make a dedicated assessment of working conditions
and occupational risks in new workplaces;
● to re-evaluate professional risks;
● to proceed with workplace safety and first aid
trainings;
● to implement the Occupational Health and Safety
Control System, an automated toolkit for our
OHS management system efficacy. It helps to plan,
establish responsibility, identify resources, take
measures and analyse the entire occupational health
and safety management system; and
● to strengthen safety measures for high-risk work
performed by the Company’s employees and third-
party organisations.
34 – 35
Annual Report
Overview
Strategic
Report
Operational
Review
Financial
Review Corporate Governance
Financial
Statements 2023
Internal measures External measures
• new employees are checked for corruption risks prior
to employment;
• all employees sign a pledge to follow the Anti-Corruption
Policy;
• employees from the procurement and real estate
departments as well as in our stores take anti-corruption
courses and attend briefings;
• employees exposed to higher corruption risk, for example,
from procurement and real estate departments, fill out
declarations;
• contracts are monitored every six months;
• critical business processes (e g , receipts, write-offs
and returns) are subject to oversight procedures using
IT monitoring software; and
• appeals are addressed via feedback channels
We thoroughly inspect all potential suppliers and service
providers prior to contracting, namely:
• documentation;
• financial health (balance sheets, assets, turnover, debts,
credits, and court proceedings);
• absence of affiliation to our other suppliers or our employees;
• customer base, turnover matching the declared tax history;
• local suppliers are additionally monitored;
• our suppliers sign a binding agreement in which they accept
all anti-corruption policy clauses;
• if suppliers and contractors violate the anti-corruption
policy, O’KEY Group is entitled to terminate their contracts
immediately
These measures imply
compliance tests for employees
and suppliers to make
transactions more transparent
and better detect violations.
The year of 2023 marked four violations of the Company’s
rules and standards. Internal checks were carried
out on all identified violations, resulted in a dismissal
of a hypermarket director and two of his deputies. Three
hotline messages were also received. All the revealed
facts and reports were promptly investigated by the Anti-
Corruption Unit of the Security and Risk Department.
In three cases, the information was not confirmed.
In 2023, a number of anti-corruption procedures
were updated to obtain earlier warnings and prevent
such incidents. In 2024, we plan to further implement
and enhance our action plans to develop a culture of zero
tolerance of the Company’s employees and suppliers
to corruption in any form.
On the eve of the New Year 2024, we conducted a win-
win lottery among the employees of O’KEY Group
to draw gifts received from our suppliers and contractors
and given by our commercial department employees
to the lottery fund.
The Company plans to complete the implementation
of a programme for the full-scale use of the DLP (Data
Loss Prevention) system. The system is set to prevent
leakage of commercial and sensitive information
and personal data of the Company’s employees.
We also plan to conduct internal audits in the Company’s
departments in order to identify and prevent
any possible corruption among employees, including
eliminating conditions and causes that may contribute
to the emergence of corruption schemes in the future.
Environmental Responsibility
Our customers are increasingly conscious of environmental issues.
The retail industry is impacted by shifts in environmental regulations
and investor evaluations that are based on environmental, social,
and governance (ESG) criteria. Consequently, it has become necessary
for businesses to adopt environmentally responsible practices in order
to secure their position in the market sustainably. At O’KEY Group,
we prioritise resource conservation and minimisation of our carbon
footprint, and thus we implement various strategies to achieve this.
Since 2019, our Company has been implementing the Live
Green corporate policy, which serves as a guiding force
for our operations. This policy motivates us to initiate
projects that align with our core values. We are constantly
seeking out innovative methods to reduce resource
consumption and we are advocating for ESG principles
amongst our customers to improve our sustainability
initiatives. Working with environmental and social
NGOs provides us with a platform to launch awareness
campaigns that serve this purpose.
Reducing the use of disposable
plastic packaging
O’KEY Group has launched various initiatives to reduce
the use of disposable plastic packaging across
its operations. The Company has been gradually
introducing eco-friendly alternatives to replace traditional
plastic packaging. For instance, O’KEY Group has launched
an initiative to replace plastic bags with paper bags
or reusable bags. The Company has also introduced eco-
friendly packaging for fruits and vegetables, such as using
biodegradable mesh bags or cardboard trays. We offer
this type of packaging not only at the cash desk but also
in the department of loose-weight products, thereby
accustoming customers to the new social norm.
At our stores, we offer bio-bags that are fully
biodegradable within a year. These bio-bags are just
as strong and high-quality as traditional plastic bags,
and they are safe to use with food items. By introducing
this initiative, O’KEY Group continues to lead the way
in the Russian food retail by offering a unique
biodegradable solution.
The Group started partnering with NGOs and suppliers.
O’KEY Group collaborates with non-governmental
organisations and suppliers to launch initiatives aimed
at reducing plastic waste. For instance, the Company
works with NGOs to raise awareness about the negative
impact of plastic waste and encourages customers to use
eco-friendly alternatives.
O’KEY Group is also working on reducing the amount
of packaging used for products. This includes exploring
ways to optimise product packaging to reduce
the use of plastic and other materials. Overall, O’KEY
Group’s initiatives to reduce the use of disposable
plastic packaging are aligned with its commitment
to environmental responsibility and sustainability.
To demonstrate our commitment to responsible
consumption and retail practices, we conduct
regular internal audits to ensure strict compliance
with the Russian environmental regulations. Additionally,
we perform a quarterly monitoring of atmospheric
and noise pollution in the intermediate zone to guarantee
that our stores do not negatively impact the local
community’s living conditions.
Energy efficiency
At O’KEY Group, we prioritise the energy efficiency
of our operations and continuously work towards
reducing our overall energy consumption. We closely
monitor environmental data, including energy use in our
supermarkets, and undertake measures to minimise
energy usage. To achieve this, we have implemented
various initiatives such as replacing outdated luminescent
lighting with modern recuperators and energy-efficient
Report
Operational
Review
Financial
Review Corporate Governance
Financial
Statements 2023
Internal measures External measures
• new employees are checked for corruption risks prior
to employment;
• all employees sign a pledge to follow the Anti-Corruption
Policy;
• employees from the procurement and real estate
departments as well as in our stores take anti-corruption
courses and attend briefings;
• employees exposed to higher corruption risk, for example,
from procurement and real estate departments, fill out
declarations;
• contracts are monitored every six months;
• critical business processes (e g , receipts, write-offs
and returns) are subject to oversight procedures using
IT monitoring software; and
• appeals are addressed via feedback channels
We thoroughly inspect all potential suppliers and service
providers prior to contracting, namely:
• documentation;
• financial health (balance sheets, assets, turnover, debts,
credits, and court proceedings);
• absence of affiliation to our other suppliers or our employees;
• customer base, turnover matching the declared tax history;
• local suppliers are additionally monitored;
• our suppliers sign a binding agreement in which they accept
all anti-corruption policy clauses;
• if suppliers and contractors violate the anti-corruption
policy, O’KEY Group is entitled to terminate their contracts
immediately
These measures imply
compliance tests for employees
and suppliers to make
transactions more transparent
and better detect violations.
The year of 2023 marked four violations of the Company’s
rules and standards. Internal checks were carried
out on all identified violations, resulted in a dismissal
of a hypermarket director and two of his deputies. Three
hotline messages were also received. All the revealed
facts and reports were promptly investigated by the Anti-
Corruption Unit of the Security and Risk Department.
In three cases, the information was not confirmed.
In 2023, a number of anti-corruption procedures
were updated to obtain earlier warnings and prevent
such incidents. In 2024, we plan to further implement
and enhance our action plans to develop a culture of zero
tolerance of the Company’s employees and suppliers
to corruption in any form.
On the eve of the New Year 2024, we conducted a win-
win lottery among the employees of O’KEY Group
to draw gifts received from our suppliers and contractors
and given by our commercial department employees
to the lottery fund.
The Company plans to complete the implementation
of a programme for the full-scale use of the DLP (Data
Loss Prevention) system. The system is set to prevent
leakage of commercial and sensitive information
and personal data of the Company’s employees.
We also plan to conduct internal audits in the Company’s
departments in order to identify and prevent
any possible corruption among employees, including
eliminating conditions and causes that may contribute
to the emergence of corruption schemes in the future.
Environmental Responsibility
Our customers are increasingly conscious of environmental issues.
The retail industry is impacted by shifts in environmental regulations
and investor evaluations that are based on environmental, social,
and governance (ESG) criteria. Consequently, it has become necessary
for businesses to adopt environmentally responsible practices in order
to secure their position in the market sustainably. At O’KEY Group,
we prioritise resource conservation and minimisation of our carbon
footprint, and thus we implement various strategies to achieve this.
Since 2019, our Company has been implementing the Live
Green corporate policy, which serves as a guiding force
for our operations. This policy motivates us to initiate
projects that align with our core values. We are constantly
seeking out innovative methods to reduce resource
consumption and we are advocating for ESG principles
amongst our customers to improve our sustainability
initiatives. Working with environmental and social
NGOs provides us with a platform to launch awareness
campaigns that serve this purpose.
Reducing the use of disposable
plastic packaging
O’KEY Group has launched various initiatives to reduce
the use of disposable plastic packaging across
its operations. The Company has been gradually
introducing eco-friendly alternatives to replace traditional
plastic packaging. For instance, O’KEY Group has launched
an initiative to replace plastic bags with paper bags
or reusable bags. The Company has also introduced eco-
friendly packaging for fruits and vegetables, such as using
biodegradable mesh bags or cardboard trays. We offer
this type of packaging not only at the cash desk but also
in the department of loose-weight products, thereby
accustoming customers to the new social norm.
At our stores, we offer bio-bags that are fully
biodegradable within a year. These bio-bags are just
as strong and high-quality as traditional plastic bags,
and they are safe to use with food items. By introducing
this initiative, O’KEY Group continues to lead the way
in the Russian food retail by offering a unique
biodegradable solution.
The Group started partnering with NGOs and suppliers.
O’KEY Group collaborates with non-governmental
organisations and suppliers to launch initiatives aimed
at reducing plastic waste. For instance, the Company
works with NGOs to raise awareness about the negative
impact of plastic waste and encourages customers to use
eco-friendly alternatives.
O’KEY Group is also working on reducing the amount
of packaging used for products. This includes exploring
ways to optimise product packaging to reduce
the use of plastic and other materials. Overall, O’KEY
Group’s initiatives to reduce the use of disposable
plastic packaging are aligned with its commitment
to environmental responsibility and sustainability.
To demonstrate our commitment to responsible
consumption and retail practices, we conduct
regular internal audits to ensure strict compliance
with the Russian environmental regulations. Additionally,
we perform a quarterly monitoring of atmospheric
and noise pollution in the intermediate zone to guarantee
that our stores do not negatively impact the local
community’s living conditions.
Energy efficiency
At O’KEY Group, we prioritise the energy efficiency
of our operations and continuously work towards
reducing our overall energy consumption. We closely
monitor environmental data, including energy use in our
supermarkets, and undertake measures to minimise
energy usage. To achieve this, we have implemented
various initiatives such as replacing outdated luminescent
lighting with modern recuperators and energy-efficient
36 – 37
Annual Report
Overview
Strategic
Report
Operational
Review
Financial
Review Corporate Governance
Financial
Statements 2023
LED lights and LED signboards. We have also replaced
outdated refrigeration elements and HVAC systems
with state-of-the-art, energy-saving devices. Furthermore,
we have adopted energy-efficient building management
systems (BMS) to maximise energy efficiency.
The energy-saving measures we implemented have
yielded impressive results. By installing LED lamps
in the parking lot and replacing some of the interior
lighting with LED fixtures, as well as implementing a “Smart
House” system that automatically controls the interior
lighting and disconnects part of the ventilation systems
at night, we were able to reduce energy consumption
by nearly 15% in the stores where these measures were
implemented.
Compared to the same
period last year, electricity
consumption was reduced
by 5.1% in 2023
2021 2022 2023
Total amount
of consumed
energy, kWh
387,849 372,356 353,373
LFL 380,726 364,612 338,110
Waste Management
The Waste Management Policy is applied across all of our
stores at O’KEY Group to regulate our waste management
processes.
2021 2022 2023
Proceeds from sales
of recyclable materials,
RUB mn
389.4 293.3 244.1
At our company, we prioritise reducing the amount
of waste that ends up in landfills by implementing separate
waste collection. We take additional steps by transporting
biological waste and lamps to specialised facilities, while
recyclable waste such as polythene film, plastic boxes,
and wastepaper is compressed and sold for further
recycling. Additionally, we collect and sell banana boxes,
waste oil, pallets, and metal scrap for recycling purposes.
To ensure responsible waste management, our main
operational sites feature water treatment facilities that
include petrol and sand catchers to filter stormwater
from parking areas. Before being discharged into public
sewers, we employ grease catchers that filter wastewater
from our production facilities.
Our Communities
O’KEY Group extends support to disadvantaged communities
within its operational regions. This includes individuals and families
who face financial hardship, single mothers, those belonging
to large families, elderly individuals who require assistance,
and children with disabilities. Our aid efforts in 2023 were
carried out independently and in collaboration with various
stakeholders, including non-profit organisations volunteers,
and charitable foundations. These partnerships allowed us
to distribute funds and food to those in need more effectively.
Priorities of O’KEY
Group’s charity
programmes
● To help people in hardship
● To help veterans of the Great
Patriotic war
● To support children’s artistic
endeavours
Major charity
partners
● Advita
● “Step forward” festival
● Local charity foundations
● Various humanitarian
organisations that help people
in need
Directions
of help
● Providing financial assistance
● Collaborating with foundations
and non-profit organisations
to feature fundraising activities
and grocery donations
● Providing assistance with food
supplies
Supporting Vulnerable Groups
Being a socially responsible corporation, our aim
is to assist disadvantaged communities and hike consumer
awareness regarding the significance of caring for those
who require the most help.
The high inflation rate and unstable economic
conditions had adverse effects on various social
groups. In collaboration with charitable foundations
and customers, O’KEY hypermarkets conducted initiatives
to gather essential items for economically disadvantaged
communities. The campaigns were aimed at aiding low-
income families with children, the elderly, disabled
individuals, and those facing the difficult choice between
purchasing food or medicine.
Several “Basket of Kindness” campaigns were conducted
in various regions of the country with the aim of assisting
individuals in need. As part of this initiative, designated
boxes were placed in supermarkets where patrons
could donate food. The groceries were made available
in a straightforward and uncomplicated manner. Such
assistance has been and will continue to be crucial
for individuals facing difficult circumstances. Foodbank
Rus is a Russian charitable organisation that provides
direct support to local communities and serves
Report
Operational
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Financial
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Financial
Statements 2023
LED lights and LED signboards. We have also replaced
outdated refrigeration elements and HVAC systems
with state-of-the-art, energy-saving devices. Furthermore,
we have adopted energy-efficient building management
systems (BMS) to maximise energy efficiency.
The energy-saving measures we implemented have
yielded impressive results. By installing LED lamps
in the parking lot and replacing some of the interior
lighting with LED fixtures, as well as implementing a “Smart
House” system that automatically controls the interior
lighting and disconnects part of the ventilation systems
at night, we were able to reduce energy consumption
by nearly 15% in the stores where these measures were
implemented.
Compared to the same
period last year, electricity
consumption was reduced
by 5.1% in 2023
2021 2022 2023
Total amount
of consumed
energy, kWh
387,849 372,356 353,373
LFL 380,726 364,612 338,110
Waste Management
The Waste Management Policy is applied across all of our
stores at O’KEY Group to regulate our waste management
processes.
2021 2022 2023
Proceeds from sales
of recyclable materials,
RUB mn
389.4 293.3 244.1
At our company, we prioritise reducing the amount
of waste that ends up in landfills by implementing separate
waste collection. We take additional steps by transporting
biological waste and lamps to specialised facilities, while
recyclable waste such as polythene film, plastic boxes,
and wastepaper is compressed and sold for further
recycling. Additionally, we collect and sell banana boxes,
waste oil, pallets, and metal scrap for recycling purposes.
To ensure responsible waste management, our main
operational sites feature water treatment facilities that
include petrol and sand catchers to filter stormwater
from parking areas. Before being discharged into public
sewers, we employ grease catchers that filter wastewater
from our production facilities.
Our Communities
O’KEY Group extends support to disadvantaged communities
within its operational regions. This includes individuals and families
who face financial hardship, single mothers, those belonging
to large families, elderly individuals who require assistance,
and children with disabilities. Our aid efforts in 2023 were
carried out independently and in collaboration with various
stakeholders, including non-profit organisations volunteers,
and charitable foundations. These partnerships allowed us
to distribute funds and food to those in need more effectively.
Priorities of O’KEY
Group’s charity
programmes
● To help people in hardship
● To help veterans of the Great
Patriotic war
● To support children’s artistic
endeavours
Major charity
partners
● Advita
● “Step forward” festival
● Local charity foundations
● Various humanitarian
organisations that help people
in need
Directions
of help
● Providing financial assistance
● Collaborating with foundations
and non-profit organisations
to feature fundraising activities
and grocery donations
● Providing assistance with food
supplies
Supporting Vulnerable Groups
Being a socially responsible corporation, our aim
is to assist disadvantaged communities and hike consumer
awareness regarding the significance of caring for those
who require the most help.
The high inflation rate and unstable economic
conditions had adverse effects on various social
groups. In collaboration with charitable foundations
and customers, O’KEY hypermarkets conducted initiatives
to gather essential items for economically disadvantaged
communities. The campaigns were aimed at aiding low-
income families with children, the elderly, disabled
individuals, and those facing the difficult choice between
purchasing food or medicine.
Several “Basket of Kindness” campaigns were conducted
in various regions of the country with the aim of assisting
individuals in need. As part of this initiative, designated
boxes were placed in supermarkets where patrons
could donate food. The groceries were made available
in a straightforward and uncomplicated manner. Such
assistance has been and will continue to be crucial
for individuals facing difficult circumstances. Foodbank
Rus is a Russian charitable organisation that provides
direct support to local communities and serves
38 – 39
Annual Report
Overview
Strategic
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Operational
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Financial
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Financial
Statements 2023
as an exemplary model for transparent and effective social
outreach efforts.
We also entered into a long-term partnership
with the “Dari Edu” charitable foundation to install
boxes in our stores on a permanent basis to collect
food products with an extra shelf life. On a regular
basis, volunteers from the foundation empty the boxes
and donate food to those in need.
Child Support
Supporting children is a top priority for O’KEY Group.
Our objective is to foster the creative abilities of children
with disabilities.
Throughout 2023, we provided charitable aid to the “Step
Forward” International Art Festival for such children in line
with our primary objective. The festival is a sustainable
platform that showcases the artistic potential of children
with disabilities. Renowned artists, academic symphony
orchestras, and conductors participated in concert
programmes alongside these children. O’KEY Group
donated RUB 500 thousand to the festival to assist these
children in realising their full potential, building self-
assurance, and fulfilling their cherished aspirations.
Support with Treatment
Since 2016, O’KEY Group has been dedicated to providing
financial assistance for medical treatment for children
and adults with cancer. O’KEY Group is a long-time
partner of AdVita, a St. Petersburg-based charitable
foundation that specialises in helping and has been one
of its loyal charity partners for a long time. We have
installed donation boxes next to our counters in our
hypermarkets in St. Petersburg, so that our customers can
aid those in need.
For several years now, the funds collected through these
donation boxes have been utilised primarily for diagnosis
and treatment. Various medications and laboratory
supplies are purchased, especially for the laboratory
of the Raisa Gorbacheva Memorial Research Institute
of Children Oncology, Hematology, and Transplantation,
which is a participant in the programme.
Over RUB
1.7 mn
raised through donation boxes
in 2023
RUB
17.5 mn
raised in total
Veterans support
Since 2002, O’KEY has been showing its support
for the veterans of the Great Patriotic War through
an annual campaign. This initiative aims to honour
and provide aid to those who fought for the country’s
freedom and peace.
Throughout the years, we have extended our assistance
to veterans of the Great Patriotic War in all the regions
where we operate. As part of our efforts, we distribute
gift cards to them ahead of this significant holiday. This
gesture allows them to make purchases in our stores,
which we hope would make their lives more comfortable.
Report
Operational
Review
Financial
Review Corporate Governance
Financial
Statements 2023
as an exemplary model for transparent and effective social
outreach efforts.
We also entered into a long-term partnership
with the “Dari Edu” charitable foundation to install
boxes in our stores on a permanent basis to collect
food products with an extra shelf life. On a regular
basis, volunteers from the foundation empty the boxes
and donate food to those in need.
Child Support
Supporting children is a top priority for O’KEY Group.
Our objective is to foster the creative abilities of children
with disabilities.
Throughout 2023, we provided charitable aid to the “Step
Forward” International Art Festival for such children in line
with our primary objective. The festival is a sustainable
platform that showcases the artistic potential of children
with disabilities. Renowned artists, academic symphony
orchestras, and conductors participated in concert
programmes alongside these children. O’KEY Group
donated RUB 500 thousand to the festival to assist these
children in realising their full potential, building self-
assurance, and fulfilling their cherished aspirations.
Support with Treatment
Since 2016, O’KEY Group has been dedicated to providing
financial assistance for medical treatment for children
and adults with cancer. O’KEY Group is a long-time
partner of AdVita, a St. Petersburg-based charitable
foundation that specialises in helping and has been one
of its loyal charity partners for a long time. We have
installed donation boxes next to our counters in our
hypermarkets in St. Petersburg, so that our customers can
aid those in need.
For several years now, the funds collected through these
donation boxes have been utilised primarily for diagnosis
and treatment. Various medications and laboratory
supplies are purchased, especially for the laboratory
of the Raisa Gorbacheva Memorial Research Institute
of Children Oncology, Hematology, and Transplantation,
which is a participant in the programme.
Over RUB
1.7 mn
raised through donation boxes
in 2023
RUB
17.5 mn
raised in total
Veterans support
Since 2002, O’KEY has been showing its support
for the veterans of the Great Patriotic War through
an annual campaign. This initiative aims to honour
and provide aid to those who fought for the country’s
freedom and peace.
Throughout the years, we have extended our assistance
to veterans of the Great Patriotic War in all the regions
where we operate. As part of our efforts, we distribute
gift cards to them ahead of this significant holiday. This
gesture allows them to make purchases in our stores,
which we hope would make their lives more comfortable.
OPERATIONAL
REVIEW
Our three complementary formats, O’KEY hypermarkets,
DA! discounters, and the e-commerce platform, ensure
the fulfilment of customers’ needs. We have online
delivery in all cities of O’KEY presence.
3 RUB
205.8 bn
+2.8% Group net retail revenue in 2023
RUB
63.8 bn
31% reached DA! in Group net retail revenue
RUB
7.7 bn
5.4% E-commerce in Group net retail revenue
40 – 41 Annual Report Overview
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Financial
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REVIEW
Our three complementary formats, O’KEY hypermarkets,
DA! discounters, and the e-commerce platform, ensure
the fulfilment of customers’ needs. We have online
delivery in all cities of O’KEY presence.
3 RUB
205.8 bn
+2.8% Group net retail revenue in 2023
RUB
63.8 bn
31% reached DA! in Group net retail revenue
RUB
7.7 bn
5.4% E-commerce in Group net retail revenue
40 – 41 Annual Report Overview
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Report Operational
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Financial
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O’KEY
Hypermarkets
At the heart of our business are the O’KEY hypermarkets that
provide our customers with a well-curated and extensive selection
of products, aimed at creating a compelling value proposition.
We firmly believe that hypermarkets will continue to be a competitive
and potentially lucrative format. Our approach incorporates
the best practices from the food retail sector and upholds
quality standards across the spectrum, ranging from assortment
strategies to customer service and store layout design.
Performance overview
As a part of the strategic programme to enhance
the competitiveness of its hypermarkets, the Company
is upgrading its O’KEY stores. We intend to gradually
upgrade stores in key regions and locations depending
on the competitive environment.
Apart from the new design, this means implementing
a new approach towards the product range, the customer
service, and the experience. We focused on the fresh
and ultra-fresh categories, own brands and own
production, the wine and deli selection. In 2023, fresh
and ultra-fresh product categories accounted over half
of the chain’s net retail revenue.
Today, O’KEY hypermarkets are proud to offer more than
40 thousand food and non-food items, including a more
than 6 thousand SKU range of fresh meat, poultry, fish,
and dairy products, confectionery, fruit and vegetables.
All chain stores offer products of their own production,
including 300 items of ready-to-eat meals and bakery
products from the chain’s own bakery. Their growing
share in our offering follows a similar trend in consumer
behaviour observed over the past few years, with more
and more customers looking to buy ready-to-eat meals.
As of 31 December 2023, the total number of O’KEY
hypermarkets was 77, with a total selling space
of 515.8 thousand m2. In 2023, we solidified our position
in our key North-West Region of Russia by opening a new
O’KEY store in St. Petersburg. The hypermarket has
a selling space of 5,125 m2 and follows a renewed concept
created in response to market challenges.
O’KEY is proceeding with the hypermarket transformation
programme as a part of the Group’s strategy related
to strengthening its market position and supporting
its sustainable long-term growth. The programme aims
at rebalancing the assortment with a specific focus
on the fresh and ultra-fresh categories, at enhancing
the quality and range of our food and non-food products
under our own brands, maintaining an impeccable quality
of the assortment and the best service, and at renovating
hypermarkets. As of the end of 2023, O’KEY Group has
remodelled 17 O’KEY stores in its key cities of presence:
Moscow, St. Petersburg, and Sochi.
In 2024 and further, we will roll out gradually
the reformatting programme across all our hypermarket
chain. The Group believes that hypermarkets will remain
competitive in the future on the basis of intelligent
management of this format.
Hypermarkets business
in 2023 at a glance
40,000
SKUs
>50 %
Fresh & Ultra-fresh in revenue
RUB 141.9 bn
Net retail revenue
6,700 m 2
Average selling space
42 – 43 Annual Report Overview
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Hypermarkets
At the heart of our business are the O’KEY hypermarkets that
provide our customers with a well-curated and extensive selection
of products, aimed at creating a compelling value proposition.
We firmly believe that hypermarkets will continue to be a competitive
and potentially lucrative format. Our approach incorporates
the best practices from the food retail sector and upholds
quality standards across the spectrum, ranging from assortment
strategies to customer service and store layout design.
Performance overview
As a part of the strategic programme to enhance
the competitiveness of its hypermarkets, the Company
is upgrading its O’KEY stores. We intend to gradually
upgrade stores in key regions and locations depending
on the competitive environment.
Apart from the new design, this means implementing
a new approach towards the product range, the customer
service, and the experience. We focused on the fresh
and ultra-fresh categories, own brands and own
production, the wine and deli selection. In 2023, fresh
and ultra-fresh product categories accounted over half
of the chain’s net retail revenue.
Today, O’KEY hypermarkets are proud to offer more than
40 thousand food and non-food items, including a more
than 6 thousand SKU range of fresh meat, poultry, fish,
and dairy products, confectionery, fruit and vegetables.
All chain stores offer products of their own production,
including 300 items of ready-to-eat meals and bakery
products from the chain’s own bakery. Their growing
share in our offering follows a similar trend in consumer
behaviour observed over the past few years, with more
and more customers looking to buy ready-to-eat meals.
As of 31 December 2023, the total number of O’KEY
hypermarkets was 77, with a total selling space
of 515.8 thousand m2. In 2023, we solidified our position
in our key North-West Region of Russia by opening a new
O’KEY store in St. Petersburg. The hypermarket has
a selling space of 5,125 m2 and follows a renewed concept
created in response to market challenges.
O’KEY is proceeding with the hypermarket transformation
programme as a part of the Group’s strategy related
to strengthening its market position and supporting
its sustainable long-term growth. The programme aims
at rebalancing the assortment with a specific focus
on the fresh and ultra-fresh categories, at enhancing
the quality and range of our food and non-food products
under our own brands, maintaining an impeccable quality
of the assortment and the best service, and at renovating
hypermarkets. As of the end of 2023, O’KEY Group has
remodelled 17 O’KEY stores in its key cities of presence:
Moscow, St. Petersburg, and Sochi.
In 2024 and further, we will roll out gradually
the reformatting programme across all our hypermarket
chain. The Group believes that hypermarkets will remain
competitive in the future on the basis of intelligent
management of this format.
Hypermarkets business
in 2023 at a glance
40,000
SKUs
>50 %
Fresh & Ultra-fresh in revenue
RUB 141.9 bn
Net retail revenue
6,700 m 2
Average selling space
42 – 43 Annual Report Overview
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Private Labels
O’KEY private labels (PL) have earned an excellent reputation
for outstanding quality and a wide selection of goods. Over
the years, we have been successful in our strategy of the rapid
development of own brands, delivering on a more balanced
assortment and offering our customers goods of superior quality
at a better price (15–20% cheaper than branded alternatives).
Our variety of private label products has three major
brands covering the entry, medium, and premium price
segments, as well as several own brands in Pet Food
and C&D categories.
Throughout 2023, we worked hard to ensure an excellent
value for money for our customers. With the ultimate goal
of offering a variety of high-grade products at attractive
prices to customers, O’KEY continued to enhance
the quality and to update the existing range of its private
labels.
Despite the challenges we faced for private labels
in the reporting year, we managed to expand our
imports by 70% year-on-year with new offers for PLs,
as well as exclusive brands (Basso, CLEACE, Delicios,
Lapiths, Los Tres, and Verdini).
In 2023, the share of private label products amounted
to 7.0% of O’KEY hypermarkets net retail revenue,
and to 10.9% of the net retail revenue of respective
product categories where private labels are present.
In 2023, O’KEY and the O’KEY Selection private label
products won ten gold medals at the prestigious
international Quality Guarantee competition, and three
products received a diploma.
Plans
Our strategic priority in our own brands development
is to ensure the highest quality of products along
with a diverse assortment.
In 2024, we plan:
● to enlarge the range of bio/organic products under
private labels;
● to double imports and increase the exclusive brands
in terms of both SKUs and customer needs we meet;
● to expand the geography of imports (India, South
America, Australia, Germany, etc.), launching new
tastes for our customers;
● to continue rebranding and redesign of premium SKUs;
● to continue revision of the C&D range towards more
premium level; and
● to continue to improve the quality of the current
assortment to provide customers with the most
delicious and attractive PLs products.
Gold medals
● Preserved mussels in oil 180gO’KEY
● Camembert cheese 50% O’KEY
● Beef for cooking cuts
chilled 400g O’KEY
● Chips paprika 140g O’KEY
● Milk UHT 3 2% O’KEY
● Raspberry jam O’KEY
● Beans jar 460g O’KEY
● Canned corn 340g O’KEY
● Condensed milk 8 5% 380g O’KEY
● Mineral water with gas 1,5l O’KEY
Diplomas
● Chevapchichi Balkan 300g O’KEY
● Moiva smoked fish 300g O’KEY
● Herring cut file in oil
with dill 500g O’KEY
O’KEY DAILY
(That’s what you need!) 1
entry segment 348 SKUs
O’KEY
medium segment 1,134 SKUs
1 “O’KEY DAILY” is applied for food categories, “That’s What You Need!” is applied for wine and non-food categories.
Fantasy Brands
(Pet Food and C&D)
324 SKUs
Selection of O’KEY
premium segment 104 SKUs
1,910 private label SKUs
available in O’KEY hypermarkets
44 – 45 Annual Report Overview
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Statements 2023
O’KEY private labels (PL) have earned an excellent reputation
for outstanding quality and a wide selection of goods. Over
the years, we have been successful in our strategy of the rapid
development of own brands, delivering on a more balanced
assortment and offering our customers goods of superior quality
at a better price (15–20% cheaper than branded alternatives).
Our variety of private label products has three major
brands covering the entry, medium, and premium price
segments, as well as several own brands in Pet Food
and C&D categories.
Throughout 2023, we worked hard to ensure an excellent
value for money for our customers. With the ultimate goal
of offering a variety of high-grade products at attractive
prices to customers, O’KEY continued to enhance
the quality and to update the existing range of its private
labels.
Despite the challenges we faced for private labels
in the reporting year, we managed to expand our
imports by 70% year-on-year with new offers for PLs,
as well as exclusive brands (Basso, CLEACE, Delicios,
Lapiths, Los Tres, and Verdini).
In 2023, the share of private label products amounted
to 7.0% of O’KEY hypermarkets net retail revenue,
and to 10.9% of the net retail revenue of respective
product categories where private labels are present.
In 2023, O’KEY and the O’KEY Selection private label
products won ten gold medals at the prestigious
international Quality Guarantee competition, and three
products received a diploma.
Plans
Our strategic priority in our own brands development
is to ensure the highest quality of products along
with a diverse assortment.
In 2024, we plan:
● to enlarge the range of bio/organic products under
private labels;
● to double imports and increase the exclusive brands
in terms of both SKUs and customer needs we meet;
● to expand the geography of imports (India, South
America, Australia, Germany, etc.), launching new
tastes for our customers;
● to continue rebranding and redesign of premium SKUs;
● to continue revision of the C&D range towards more
premium level; and
● to continue to improve the quality of the current
assortment to provide customers with the most
delicious and attractive PLs products.
Gold medals
● Preserved mussels in oil 180gO’KEY
● Camembert cheese 50% O’KEY
● Beef for cooking cuts
chilled 400g O’KEY
● Chips paprika 140g O’KEY
● Milk UHT 3 2% O’KEY
● Raspberry jam O’KEY
● Beans jar 460g O’KEY
● Canned corn 340g O’KEY
● Condensed milk 8 5% 380g O’KEY
● Mineral water with gas 1,5l O’KEY
Diplomas
● Chevapchichi Balkan 300g O’KEY
● Moiva smoked fish 300g O’KEY
● Herring cut file in oil
with dill 500g O’KEY
O’KEY DAILY
(That’s what you need!) 1
entry segment 348 SKUs
O’KEY
medium segment 1,134 SKUs
1 “O’KEY DAILY” is applied for food categories, “That’s What You Need!” is applied for wine and non-food categories.
Fantasy Brands
(Pet Food and C&D)
324 SKUs
Selection of O’KEY
premium segment 104 SKUs
1,910 private label SKUs
available in O’KEY hypermarkets
44 – 45 Annual Report Overview
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Supply Chain
O’KEY Group operates an efficient supply chain that allows us to serve
our customers’ needs in all our regions of operation. In 2023, we continued
to enhance our supply chain via upgrading our existing distribution
centres, improving our logistic operations, implementing cutting-edge
digital solutions, and building transparent relationships with suppliers.
The O’KEY logistics system encompasses four distribution
centres: two federal centres in Moscow and two regional
centres in St. Petersburg with a total floor space
of 101.3 thousand square metres as of December 2023.
The federal distribution centres are based in Moscow
and distribute fresh products, fruits, and vegetables,
FMCG, non-food, and alcohol products to all stores across
the country. The regional distribution centres are located
in St. Petersburg, one of them specialising in FMCG
and non-food, and the other — in fruits and vegetables
and fresh products. This supply chain organisation enables
O’KEY Group to balance between logistical costs, stock
management, and a high level of service.
In 2023:
● The 3PL project has been fully launched. The average
turnover per month is 750–800 thousand boxes.
● Improvements to Pallet Height Management
were implemented – the pallet height parameter
can be parameterised individually for each client,
as a result – the utilisation of transport increased
without compromising the frequency of shipments.
● Accounting of the recycled packaging was started.
Turnover control and increase in the volume of return
of containers to the DC.
● Yard management System (YMS) – automation
was implemented to assign suppliers to the gate
acceptance, notification of drivers on call and sms,
which increases the turnover of the dock.
● Fruits&Vegetables acceptance not later than 4:00 p.m.
was implemented for all temperature DCs. This led
to an increase in the share of PBL assortment and,
as a result, an improvement in the quality of products.
● Electronic signature verification functionality
was implemented for internal movements, avoiding
the paper version of TORG-13 when moving within
the Company.
Plans for 2024:
● To start operations 3PL in Yekaterinburg
and Krasnodar;
● To optimise the distribution chain according
to the logistics value of the goods;
● To move away from PBL waves to evenly distribute
the load on the DC along the PBL flow;
● To develop video analytics at DC to improve quality
at all stages of DC operations;
● To automate the business process
of selecting a contractor for the acceptance of goods
at the DC;
● To develop the 3PL project to connect new product
categories;
● To carry out remote pre-trip medical check-up;
● To implement automated inventory system of pallets
in stock; and
● To avoid batch accounting of alcohol.
Quality and Safety
At O’KEY Group, we are committed to maintaining the utmost
standards of safety and quality throughout our entire supply
chain, with a focus on providing our customers with the freshest
and highest-quality products possible. To ensure top-quality
goods across all of our stores and to meet the evolving needs
of our customers, we implement a risk analysis and critical control
point (HACCP) approach. Our quality control system covers
every aspect of our operations, from production to consumption,
and is complemented by internal standards that often exceed
industry requirements. By adhering to these rigorous standards,
we strive to deliver unparalleled quality and safety to our customers.
O’KEY Group maintains quality and safety
through a dedicated quality control department, which
upholds internal quality standards that align with both
Russian Federation legal requirements and global best
practices in retail.
O’KEY Group’s Quality Management System (QMS) is built
upon the principles of risk analysis and Critical Control
Points (HACCP) to ensure the safety of our products. Our
QMS adheres to key hygiene control measures at all stages
of food production. As legislation and market dynamics
evolve, we continuously refine our approaches to quality
control, aligning our QMS with cross-functional targets,
customer needs, and business objectives. We also regularly
update our additional quality standards to align with global
retail best practices and the specific requirements of our
business.
Standard measures for ensuring quality and safety
at O’KEY Group include conducting preliminary quality
control procedures, monitoring product assortment
in both stores and warehouses, and conducting external
and internal audits of our stores and supply chain. Our own
production and private label products undergo laboratory
monitoring to confirm their high quality and safety.
One of the key components of the guarantee
of constant product quality is to ensure compliance
with the requirements of internal processes; therefore,
we conduct internal quality audits of our hypermarkets
on the regular bases.
In 2023, we conducted 822 quality checks of stores
for compliance with processes across the country.
In addition, in 2023, we tested 11,373 product names
in independent accredited laboratories, which
is an average of almost 1,000 items per month (948).
The products passed a full examination in terms of quality
and safety parameters, in accordance with the established
legal requirements, and often more stringent criteria
established by the Company.
We are also implementing initiatives to improve
the skills of our employees in quality control. In 2023,
all our employees in the stores passed special courses
on the following topics:
● – “Basic rules for assessing the quality of products
of the F&V category in the summer assortment
of O’KEY hypermarkets”; and
● – “Training on acceptance for the quality of alcoholic
beverages, directly imported goods, food products
except for F&V category, and non-food products”.
An informational introductory video was shot
on the process of acceptance of products of F&V category
at the Company’s distribution centres.
In 2023, 59 product quality specifications were developed
for internal use.
In 2023, we established a process for automating product
quality acceptance in O’KEY distribution centres, which
CENTRAL FD
SOUTH FD
NORTH-WEST FD
VOLGA FD
URAL FD SIBERIA FD
Murmansk
St. Petersburg
Syktyvkar
Ufa Tyumen
Omsk
Novosibirsk Krasnoyarsk
Irkutsk
Surgut
Ekaterinburg
Astrakhan
Rostov-
on-Don
Krasnodar
Sochi
Nizhny
Novgorod
Moscow
Togliatti
OVERALL NUMBER OF DCs: 4
(53.8 k m 2 and 18.1 k m 2 )
Moscow: 2
Fruits
and vegetables
Fresh
FMCG
Non-food
Alcohol
Categories:
(21.8 k m 2 and 7.6 k m 2
)
St. Petersburg: 2
Fruits
and vegetables
Fresh
Non-food
FMCG
Categories:
CENTRALISATION RATE: 63.4%
46 – 47 Annual Report Overview
Strategic
Report Operational
Review
Financial
Review Corporate Governance
Financial
Statements 2023
O’KEY Group operates an efficient supply chain that allows us to serve
our customers’ needs in all our regions of operation. In 2023, we continued
to enhance our supply chain via upgrading our existing distribution
centres, improving our logistic operations, implementing cutting-edge
digital solutions, and building transparent relationships with suppliers.
The O’KEY logistics system encompasses four distribution
centres: two federal centres in Moscow and two regional
centres in St. Petersburg with a total floor space
of 101.3 thousand square metres as of December 2023.
The federal distribution centres are based in Moscow
and distribute fresh products, fruits, and vegetables,
FMCG, non-food, and alcohol products to all stores across
the country. The regional distribution centres are located
in St. Petersburg, one of them specialising in FMCG
and non-food, and the other — in fruits and vegetables
and fresh products. This supply chain organisation enables
O’KEY Group to balance between logistical costs, stock
management, and a high level of service.
In 2023:
● The 3PL project has been fully launched. The average
turnover per month is 750–800 thousand boxes.
● Improvements to Pallet Height Management
were implemented – the pallet height parameter
can be parameterised individually for each client,
as a result – the utilisation of transport increased
without compromising the frequency of shipments.
● Accounting of the recycled packaging was started.
Turnover control and increase in the volume of return
of containers to the DC.
● Yard management System (YMS) – automation
was implemented to assign suppliers to the gate
acceptance, notification of drivers on call and sms,
which increases the turnover of the dock.
● Fruits&Vegetables acceptance not later than 4:00 p.m.
was implemented for all temperature DCs. This led
to an increase in the share of PBL assortment and,
as a result, an improvement in the quality of products.
● Electronic signature verification functionality
was implemented for internal movements, avoiding
the paper version of TORG-13 when moving within
the Company.
Plans for 2024:
● To start operations 3PL in Yekaterinburg
and Krasnodar;
● To optimise the distribution chain according
to the logistics value of the goods;
● To move away from PBL waves to evenly distribute
the load on the DC along the PBL flow;
● To develop video analytics at DC to improve quality
at all stages of DC operations;
● To automate the business process
of selecting a contractor for the acceptance of goods
at the DC;
● To develop the 3PL project to connect new product
categories;
● To carry out remote pre-trip medical check-up;
● To implement automated inventory system of pallets
in stock; and
● To avoid batch accounting of alcohol.
Quality and Safety
At O’KEY Group, we are committed to maintaining the utmost
standards of safety and quality throughout our entire supply
chain, with a focus on providing our customers with the freshest
and highest-quality products possible. To ensure top-quality
goods across all of our stores and to meet the evolving needs
of our customers, we implement a risk analysis and critical control
point (HACCP) approach. Our quality control system covers
every aspect of our operations, from production to consumption,
and is complemented by internal standards that often exceed
industry requirements. By adhering to these rigorous standards,
we strive to deliver unparalleled quality and safety to our customers.
O’KEY Group maintains quality and safety
through a dedicated quality control department, which
upholds internal quality standards that align with both
Russian Federation legal requirements and global best
practices in retail.
O’KEY Group’s Quality Management System (QMS) is built
upon the principles of risk analysis and Critical Control
Points (HACCP) to ensure the safety of our products. Our
QMS adheres to key hygiene control measures at all stages
of food production. As legislation and market dynamics
evolve, we continuously refine our approaches to quality
control, aligning our QMS with cross-functional targets,
customer needs, and business objectives. We also regularly
update our additional quality standards to align with global
retail best practices and the specific requirements of our
business.
Standard measures for ensuring quality and safety
at O’KEY Group include conducting preliminary quality
control procedures, monitoring product assortment
in both stores and warehouses, and conducting external
and internal audits of our stores and supply chain. Our own
production and private label products undergo laboratory
monitoring to confirm their high quality and safety.
One of the key components of the guarantee
of constant product quality is to ensure compliance
with the requirements of internal processes; therefore,
we conduct internal quality audits of our hypermarkets
on the regular bases.
In 2023, we conducted 822 quality checks of stores
for compliance with processes across the country.
In addition, in 2023, we tested 11,373 product names
in independent accredited laboratories, which
is an average of almost 1,000 items per month (948).
The products passed a full examination in terms of quality
and safety parameters, in accordance with the established
legal requirements, and often more stringent criteria
established by the Company.
We are also implementing initiatives to improve
the skills of our employees in quality control. In 2023,
all our employees in the stores passed special courses
on the following topics:
● – “Basic rules for assessing the quality of products
of the F&V category in the summer assortment
of O’KEY hypermarkets”; and
● – “Training on acceptance for the quality of alcoholic
beverages, directly imported goods, food products
except for F&V category, and non-food products”.
An informational introductory video was shot
on the process of acceptance of products of F&V category
at the Company’s distribution centres.
In 2023, 59 product quality specifications were developed
for internal use.
In 2023, we established a process for automating product
quality acceptance in O’KEY distribution centres, which
CENTRAL FD
SOUTH FD
NORTH-WEST FD
VOLGA FD
URAL FD SIBERIA FD
Murmansk
St. Petersburg
Syktyvkar
Ufa Tyumen
Omsk
Novosibirsk Krasnoyarsk
Irkutsk
Surgut
Ekaterinburg
Astrakhan
Rostov-
on-Don
Krasnodar
Sochi
Nizhny
Novgorod
Moscow
Togliatti
OVERALL NUMBER OF DCs: 4
(53.8 k m 2 and 18.1 k m 2 )
Moscow: 2
Fruits
and vegetables
Fresh
FMCG
Non-food
Alcohol
Categories:
(21.8 k m 2 and 7.6 k m 2
)
St. Petersburg: 2
Fruits
and vegetables
Fresh
Non-food
FMCG
Categories:
CENTRALISATION RATE: 63.4%
46 – 47 Annual Report Overview
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Report Operational
Review
Financial
Review Corporate Governance
Financial
Statements 2023
made the process of sampling and examination of goods
more standardised, orderly and efficient.
The Company actively participates in regional and national
quality initiatives. O’KEY Group successfully passed
the inspection audit and received an excellent status
as part of the voluntary certification “Made on Don”
in the Southern region of Russia. Moreover, the Company
took part in ACORT quality committee initiatives, such
as communication with authorities on legislative issues,
participation in round tables with state control bodies,
and contribution to new normative documents developing
procedures.
We participated as a speaker in various events organised
by the Ministry of Industry and Trade of the Russian
Federation, Roskachestvo, specialised unions and other
organisations.
Special attention is paid to the quality of products
manufactured under our private labels (PL). Last year,
463 new domestic products under various private labels
were approved by the Quality Control Department.
As a result of fruitful work, dairy products produced
under the O’KEY trademark received a distinctive “Quality
Mark” of the national monitoring system Roskachestvo
by the Government of the Russian Federation. The award
ceremony took place during Retail Week 2023.
At the “Quality Assurance 2023” International Competition,
our private labels and own production received 20 gold
medals and eight Quality Diplomas, which indicates that
the jury recognised the winning products as the best
in the presented nominations.
Over 2023, the Company continued its project for the risk
evaluation and quality audit of products from our suppliers.
In the reporting year, we conducted 21 audits of our own
production at supplier’s facilities. We also conducted
98 audits of our private label products’ suppliers. In 2024,
we will continue to do so to ensure the quality of our
products for our customers.
In addition, a supplier quality assessment system
has been developed, which is based on the following
main parameters: the results of laboratory control
of the supplier’s products, customer reviews of this
product, audits, and other essential quality and safety
parameters. In 2023, this rating covered high-risk products
manufactured under their own trademarks.
In 2023, we continued to improve the quality of our own
products. To do this, we have developed and updated
the Company’s regulatory documents, including 24 internal
standards, technical instructions, procedures related
to the quality of products such as our own pastries, meat
and fish, processes in stores and work with contractors
providing various kinds of services. Together
with the commercial and operational teams, we have
developed 514 technical specifications of the dishes.
We have also introduced a new method of confirming
the expiration date for 60 items, including the category
of semi-finished products, in addition, the expiration dates
for 114 SKUs of packaged products of our own production
have been declared and confirmed, which can be sold both
through online delivery and through traditional retail.
During the year, we conducted all the necessary laboratory
tests of our own products and received 61 declarations
for 2,073 product names.
Before delivering goods directly to stores and distribution
centres, the quality control department monitors labelling
and documents for products at the stage of entering
into the assortment. This control is carried out on a joint
portal with ART-TRADE suppliers and allows you to quickly
resolve issues with suppliers in case of inconsistencies. This
allows us to upload the necessary data in a timely manner,
avoid technical errors on the part of suppliers and comply
with all necessary deadlines. In 2023, 15,682 product
names were agreed upon and delivered to stores using
the platform, which accounted for 100% of the supplier
applications received.
Plans
The Company intends to continue enhancing its quality
management system and food safety control procedures,
going forward in terms of supplied branded goods, own
production, private labels, imports as well as operations
at its distribution centres.
In 2024, we will focus on:
● Continuing the updating of the Сompany’s Quality
Management System;
● Training Hypermarket directors and key personnel
on product quality and safety issues;
● Maintaining the process of introducing new products
into the range of own production, own brands and all
categories of goods sold on the network;
● Ensuring optimal shelf life of products manufactured
in our hypermarkets;
● Automating the reporting on traceability systems
(FGIS Mercury);
● Educating our suppliers in quality management;
● Expanding the scope of the suppliers evaluation
system “Supplier Quality Rating”;
● Creating quality catalogues for products of our
own production and our own brands, which will take
into account the best practices in terms of product
quality, including, but not limited to consumer
preferences, as well as communication through
packaging;
● Inspecting suppliers ‘ production facilities in terms
of quality and periodic laboratory testing
● Controlling products sold, paying special attention
to products under their own trademarks and goods
of their own production; and
● Changing the approach in creating PLs and own
production.
E-Commerce
In 2023, the main focus of the e-commerce development
was the optimisation of processes and increasing
the efficiency of operations. These initiatives allowed us
to maintain our solid position in a fast changing market
environment and demonstrate strong online revenue
growth.
A landmark event during the previous year was the pilot
launch of an O’KEY online store in the regions. In 2023,
as part of the test, our internet store was launched in two
new cities of Sochi and Krasnodar. The launches were
successful and showed potential for further development,
as we saw consumer demand in the regions as stable,
with a tendency for growth.
Also, in 2023 we put special focus on the quality
of service and goods sold via online channel. As part
of these measures, products marked with a Quality
Mark (Roskachestvo) were separately highlighted
on the showcases of our online store.
Highlights of 2023
Share of e-commerce in Moscow
7.9 %
Share of e-commerce in St.
Petersburg
3.8 %
Share of e-commerce in O’KEY
revenue
5.4 %
Online sales
+24 % YoY
3,646
thousand orders
6,053
thousand active users of the website
and mobile application
48 – 49 Annual Report Overview
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Report Operational
Review
Financial
Review Corporate Governance
Financial
Statements 2023
more standardised, orderly and efficient.
The Company actively participates in regional and national
quality initiatives. O’KEY Group successfully passed
the inspection audit and received an excellent status
as part of the voluntary certification “Made on Don”
in the Southern region of Russia. Moreover, the Company
took part in ACORT quality committee initiatives, such
as communication with authorities on legislative issues,
participation in round tables with state control bodies,
and contribution to new normative documents developing
procedures.
We participated as a speaker in various events organised
by the Ministry of Industry and Trade of the Russian
Federation, Roskachestvo, specialised unions and other
organisations.
Special attention is paid to the quality of products
manufactured under our private labels (PL). Last year,
463 new domestic products under various private labels
were approved by the Quality Control Department.
As a result of fruitful work, dairy products produced
under the O’KEY trademark received a distinctive “Quality
Mark” of the national monitoring system Roskachestvo
by the Government of the Russian Federation. The award
ceremony took place during Retail Week 2023.
At the “Quality Assurance 2023” International Competition,
our private labels and own production received 20 gold
medals and eight Quality Diplomas, which indicates that
the jury recognised the winning products as the best
in the presented nominations.
Over 2023, the Company continued its project for the risk
evaluation and quality audit of products from our suppliers.
In the reporting year, we conducted 21 audits of our own
production at supplier’s facilities. We also conducted
98 audits of our private label products’ suppliers. In 2024,
we will continue to do so to ensure the quality of our
products for our customers.
In addition, a supplier quality assessment system
has been developed, which is based on the following
main parameters: the results of laboratory control
of the supplier’s products, customer reviews of this
product, audits, and other essential quality and safety
parameters. In 2023, this rating covered high-risk products
manufactured under their own trademarks.
In 2023, we continued to improve the quality of our own
products. To do this, we have developed and updated
the Company’s regulatory documents, including 24 internal
standards, technical instructions, procedures related
to the quality of products such as our own pastries, meat
and fish, processes in stores and work with contractors
providing various kinds of services. Together
with the commercial and operational teams, we have
developed 514 technical specifications of the dishes.
We have also introduced a new method of confirming
the expiration date for 60 items, including the category
of semi-finished products, in addition, the expiration dates
for 114 SKUs of packaged products of our own production
have been declared and confirmed, which can be sold both
through online delivery and through traditional retail.
During the year, we conducted all the necessary laboratory
tests of our own products and received 61 declarations
for 2,073 product names.
Before delivering goods directly to stores and distribution
centres, the quality control department monitors labelling
and documents for products at the stage of entering
into the assortment. This control is carried out on a joint
portal with ART-TRADE suppliers and allows you to quickly
resolve issues with suppliers in case of inconsistencies. This
allows us to upload the necessary data in a timely manner,
avoid technical errors on the part of suppliers and comply
with all necessary deadlines. In 2023, 15,682 product
names were agreed upon and delivered to stores using
the platform, which accounted for 100% of the supplier
applications received.
Plans
The Company intends to continue enhancing its quality
management system and food safety control procedures,
going forward in terms of supplied branded goods, own
production, private labels, imports as well as operations
at its distribution centres.
In 2024, we will focus on:
● Continuing the updating of the Сompany’s Quality
Management System;
● Training Hypermarket directors and key personnel
on product quality and safety issues;
● Maintaining the process of introducing new products
into the range of own production, own brands and all
categories of goods sold on the network;
● Ensuring optimal shelf life of products manufactured
in our hypermarkets;
● Automating the reporting on traceability systems
(FGIS Mercury);
● Educating our suppliers in quality management;
● Expanding the scope of the suppliers evaluation
system “Supplier Quality Rating”;
● Creating quality catalogues for products of our
own production and our own brands, which will take
into account the best practices in terms of product
quality, including, but not limited to consumer
preferences, as well as communication through
packaging;
● Inspecting suppliers ‘ production facilities in terms
of quality and periodic laboratory testing
● Controlling products sold, paying special attention
to products under their own trademarks and goods
of their own production; and
● Changing the approach in creating PLs and own
production.
E-Commerce
In 2023, the main focus of the e-commerce development
was the optimisation of processes and increasing
the efficiency of operations. These initiatives allowed us
to maintain our solid position in a fast changing market
environment and demonstrate strong online revenue
growth.
A landmark event during the previous year was the pilot
launch of an O’KEY online store in the regions. In 2023,
as part of the test, our internet store was launched in two
new cities of Sochi and Krasnodar. The launches were
successful and showed potential for further development,
as we saw consumer demand in the regions as stable,
with a tendency for growth.
Also, in 2023 we put special focus on the quality
of service and goods sold via online channel. As part
of these measures, products marked with a Quality
Mark (Roskachestvo) were separately highlighted
on the showcases of our online store.
Highlights of 2023
Share of e-commerce in Moscow
7.9 %
Share of e-commerce in St.
Petersburg
3.8 %
Share of e-commerce in O’KEY
revenue
5.4 %
Online sales
+24 % YoY
3,646
thousand orders
6,053
thousand active users of the website
and mobile application
48 – 49 Annual Report Overview
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Financial
Review Corporate Governance
Financial
Statements 2023
Plans for 2024
1 To further roll out our own internet store
in the regions of O’KEY hypermarkets presence
2 To develop collaboration with aggregators in order
to widen the footprint of O’KEY’s online presence,
enhance brand recognition and increase revenue
growth
3 To improve the assortment range of own production
and bakery products in the online channel,
including planned redesign of presenting the dishes
on the website and in the mobile application
4 To retain focus on the quality of the goods sold
via online channel
5 To enhance the functionality of our website
and mobile application in order to increase conversion
rate and improve users’ shopping experience
6 To further promote ‘fast delivery’ proposition
with a high level of service and speed of delivery
7 To present all promotions and the entire range
on the Company’s online storefronts
8 To grow the share of e-commerce channel
in the Company’s revenue
DA! Discounters
The increasing emphasis on cost-effectiveness has
given rise to a new store format, which encouraged us
to reinvigorate our DA! discount concept with a premium
appeal. The DA! business continues to be a leading
expanding supermarket chain in the Russian
market, playing a crucial role in driving the Group’s
revenue growth. In 2023, DA!’s net retail sales
demonstrated a substantial growth of 19.8% year-on-
year, reaching 31.0% of the Group’s net retail revenue
in the same period.
DA! discounters leverage the best international practices,
cutting-edge in-house innovations and the state-
of-the-art technologies within the retail industry.
At the same time, DA! stores are specifically tailored
to meet the unique preferences and demands of our
target audience. Our business model has consistently
demonstrated its efficiency year after year, and we have
garnered significant recognition from our loyal customer
base.
DA! stores have a well-balanced product range, covering
all customer needs in terms of food items and the most
popular non-food items. We achieve this by integrating
our supply chain with O’KEY hypermarkets and securing
the most advantageous procurement arrangements
with our vendors, allowing us to provide our customers
with exceptional value for their money. Additionally, our
strategic store placement, exceptional customer service,
state-of-the-art equipment, and expansive shopping areas
grant DA! a distinct competitive advantage.
DA! discounters adhere to the “every day low price”
(EDLP) policy, which is largely supported by our own brand
products. Our proprietary brands provide evident cost
benefits of 20–30% in comparison to equivalent quality
branded products, effectively catering to price-sensitive
customers. These exclusive brands are meticulously
crafted and solely available at DA! stores.
Over the past three years, the discount segment of DA!
has demonstrated substantial and consistent average
annual revenue growth over 30%. We foresee a double-
digit revenue growth in the near future.
Strategic priorities of DA!
Own brands
development
Growth
and expansion
Achievement
of superior
financial results
50 – 51 Annual Report Overview
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Report Operational
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Financial
Review Corporate Governance
Financial
Statements 2023
1 To further roll out our own internet store
in the regions of O’KEY hypermarkets presence
2 To develop collaboration with aggregators in order
to widen the footprint of O’KEY’s online presence,
enhance brand recognition and increase revenue
growth
3 To improve the assortment range of own production
and bakery products in the online channel,
including planned redesign of presenting the dishes
on the website and in the mobile application
4 To retain focus on the quality of the goods sold
via online channel
5 To enhance the functionality of our website
and mobile application in order to increase conversion
rate and improve users’ shopping experience
6 To further promote ‘fast delivery’ proposition
with a high level of service and speed of delivery
7 To present all promotions and the entire range
on the Company’s online storefronts
8 To grow the share of e-commerce channel
in the Company’s revenue
DA! Discounters
The increasing emphasis on cost-effectiveness has
given rise to a new store format, which encouraged us
to reinvigorate our DA! discount concept with a premium
appeal. The DA! business continues to be a leading
expanding supermarket chain in the Russian
market, playing a crucial role in driving the Group’s
revenue growth. In 2023, DA!’s net retail sales
demonstrated a substantial growth of 19.8% year-on-
year, reaching 31.0% of the Group’s net retail revenue
in the same period.
DA! discounters leverage the best international practices,
cutting-edge in-house innovations and the state-
of-the-art technologies within the retail industry.
At the same time, DA! stores are specifically tailored
to meet the unique preferences and demands of our
target audience. Our business model has consistently
demonstrated its efficiency year after year, and we have
garnered significant recognition from our loyal customer
base.
DA! stores have a well-balanced product range, covering
all customer needs in terms of food items and the most
popular non-food items. We achieve this by integrating
our supply chain with O’KEY hypermarkets and securing
the most advantageous procurement arrangements
with our vendors, allowing us to provide our customers
with exceptional value for their money. Additionally, our
strategic store placement, exceptional customer service,
state-of-the-art equipment, and expansive shopping areas
grant DA! a distinct competitive advantage.
DA! discounters adhere to the “every day low price”
(EDLP) policy, which is largely supported by our own brand
products. Our proprietary brands provide evident cost
benefits of 20–30% in comparison to equivalent quality
branded products, effectively catering to price-sensitive
customers. These exclusive brands are meticulously
crafted and solely available at DA! stores.
Over the past three years, the discount segment of DA!
has demonstrated substantial and consistent average
annual revenue growth over 30%. We foresee a double-
digit revenue growth in the near future.
Strategic priorities of DA!
Own brands
development
Growth
and expansion
Achievement
of superior
financial results
50 – 51 Annual Report Overview
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Statements 2023
Discounter Business at a Glance
673 m2
average store selling space
31.0 %
of Group net retail revenue
220
number of stores
3,420
SKUs
average product range
>60 %
‘fresh’ in sales mix
~50 %
own brands in net retail revenue
100 %
logistics centralisation rate
DA! network has shown robust growth, transforming
from a relatedly small local network with 35 stores in 2015
to the major fast mover of the Russian grocery market
with 220 stores in Moscow, as well as in Tver, Tula, Kaluga,
Ryazan, and Moscow Regions.
Performance
RUB 63.8 bn
net retail revenue in 2023
+19.8 % YoY
DA! discounters’ key principles
● We continue to adhere to the concept
of a highly convenient store,
meeting all needs of our customers
and providing the highest possible
level of service We strive that our
customers spend their time in our
stores with smiles and pleasure
● Our customers’ wishes and rights
are our main values and guidelines
● We welcome any feedback from store
visitors and consider every complaint
or claim without any exception
in the shortest possible time,
providing a prompt response
● We value our customers’ convenience:
our wide aisles and block layouts make
shopping faster and more efficient
Our personnel are always open
and friendly to the customer
● We value our customers’ time:
we adhere to the principle of prompt
and friendly service
● Cleanliness in stores, correctness
of price tags, friendliness
and smartness of our personnel,
convenience and speed of the whole
shopping process ensure our
customers’ loyalty
● We strive to respond to all current
market trends as quickly as possible
and are successful in offering our
customers novelties in our product
range on a weekly basis
● We adhere to an EDLP policy,
largely supported by our own brand
products, which offer clear cost
advantages of 20–30% against
branded goods of comparable quality
● We are focused on supplying our
customers with the freshest goods
by improving quality control across
supply chain and by expanding our
assortment in the fresh and ultra-
fresh categories
52 – 53 Annual Report Overview
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Report Operational
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Financial
Review Corporate Governance
Financial
Statements 2023
673 m2
average store selling space
31.0 %
of Group net retail revenue
220
number of stores
3,420
SKUs
average product range
>60 %
‘fresh’ in sales mix
~50 %
own brands in net retail revenue
100 %
logistics centralisation rate
DA! network has shown robust growth, transforming
from a relatedly small local network with 35 stores in 2015
to the major fast mover of the Russian grocery market
with 220 stores in Moscow, as well as in Tver, Tula, Kaluga,
Ryazan, and Moscow Regions.
Performance
RUB 63.8 bn
net retail revenue in 2023
+19.8 % YoY
DA! discounters’ key principles
● We continue to adhere to the concept
of a highly convenient store,
meeting all needs of our customers
and providing the highest possible
level of service We strive that our
customers spend their time in our
stores with smiles and pleasure
● Our customers’ wishes and rights
are our main values and guidelines
● We welcome any feedback from store
visitors and consider every complaint
or claim without any exception
in the shortest possible time,
providing a prompt response
● We value our customers’ convenience:
our wide aisles and block layouts make
shopping faster and more efficient
Our personnel are always open
and friendly to the customer
● We value our customers’ time:
we adhere to the principle of prompt
and friendly service
● Cleanliness in stores, correctness
of price tags, friendliness
and smartness of our personnel,
convenience and speed of the whole
shopping process ensure our
customers’ loyalty
● We strive to respond to all current
market trends as quickly as possible
and are successful in offering our
customers novelties in our product
range on a weekly basis
● We adhere to an EDLP policy,
largely supported by our own brand
products, which offer clear cost
advantages of 20–30% against
branded goods of comparable quality
● We are focused on supplying our
customers with the freshest goods
by improving quality control across
supply chain and by expanding our
assortment in the fresh and ultra-
fresh categories
52 – 53 Annual Report Overview
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Financial
Review Corporate Governance
Financial
Statements 2023
In 2023, we:
● opened 27 new stores, net of closures;
● worked on the enhancement of our product range
with emphasis on fresh and ultra-fresh products
and ready-to-eat products;
● introduced more than 100 new SKUs under our private
labels;
● continued the digital transformation of the chain
through the development of a variety
of IT infrastructure projects and the implementation
of new software programs;
● DA! continued to optimise the supply chain in order
to provide a better customer experience;
● as part of our logistics optimisation, DA! expanded
its storage capacities for dry food products by renting
additional space of 10 thousand m2 at one of O’KEY
Group’s distribution centre in Moscow region; and
● modernised the lighting in DA! stores.
In our discounters’ marketing policy, we strive to get
closer to our customers and seek to meet all their
changing preferences. According to the latest marketing
research, our main customers are represented by young
families with dependent children or young childless
families, as well as working families of middle and older
age with a middle level of income. All of them are partly
promo-oriented but are willing to try fashionable new
products. Likewise, 68% of our assortment is evaluated
by customers as optimal and mostly good, which is 17%
higher than the average figures in the whole discounter
segment.
DA! discounters’ profit from synergies with O’KEY
hypermarkets in procurement, imports and relations
with suppliers and producers, which is mainly the result
of increased purchasing power, maintaining the economies
of scale effect, as well as improving the quality
of the goods we source.
To ensure robust growth, DA! discounters remained
focused on managing their balanced assortment and own
brand portfolio and continued offering the best value
for money to the customers.
In terms of our approach towards collaboration
with suppliers we strive to work directly
with manufacturers rather than with importers
and distributors. We also aim to build long-term
partnerships with our suppliers for our private labels,
while our own brand product sales often exceed
even A-branded product sales. On the other hand,
we contribute to the development of local manufacturers
by tapping into synergies with them and ensuring large-
scale purchases.
Fresh Offer
DA! discounters keep up with the general trend towards
fresh and ultra-fresh products, offering a wide range
of dairy, fresh meat and poultry, fruits and vegetables.
In 2023, the share of fruits and vegetables, fresh
and ultra-fresh products in the discounter’s sales mix
exceeded 60%.
Our range of fresh products includes own brand SKUs,
some of them under the “farm label” which represents
regional and traditional production of outstanding quality.
Another feature of our discounters is a wide (over 40 SKUs)
range of freshly baked pastries. In order to ensure freshness
of our goods, we practice direct import and deliver fruits
and vegetables to all our stores on daily basis.
Private Labels
and Own Production
We strive to offer all relevant private labels across all
our product range (with the exceptions of cigarettes,
sensitive goods and baby food) in order to motivate our
customers to recurrent visits to our shops. We have
achieved impressive results in optimising our operating
and advertising costs and applying the EDLP concept.
Therefore, our private label products are less expensive
than popular alternatives of comparable quality. We also
enhance constantly our supply chain, giving emphasis
to cost generating functions and passing all cost-saving
advantages to our customers while maintaining good
margins. All these factors enable us to build an appealing
customer value preposition and maintain relatively lower
prices than our competitors in the Russian discounter
format.
DA! own brands:
20–30 %
cheaper than branded products
of the same quality
We are focused on the prudent selection of our own
brands manufacturers and strive to develop long-term
mutually beneficial collaborations with them in order
to provide an impeccable quality of goods and ensure
perfect packaging design close or similar to the branded
assortment. To ensure all our private label manufacturers
meet the highest quality standards, we only work
with innovative manufacturers that share our commitment
to quality.
Developing Own Brand
1
Thorough selection
of manufacturers —
innovative young
companies ready
to offer a special quality
product at the best
price and to meet our
requirements
2
Joint development
of product
and packaging, close
or similar to branded
assortment in terms
of quality
3
Strict quality
control
Private label (PL) products remain one of the key drivers
of DA!’s financial results and show better sales growth
than our branded products. In 2023, PLs accounted
for around 50% of DA! revenue. We are continuously
working on extending the range, improving the quality
and packaging of our own branded products. In 2023,
we introduced more than 100 SKUs. Our assortment
of private label SKUs reached 1,367 SKUs. For our private
label, we use more than 90 registered brands that
are used as umbrella brands for different categories
and quality levels.
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Financial
Statements 2023
● opened 27 new stores, net of closures;
● worked on the enhancement of our product range
with emphasis on fresh and ultra-fresh products
and ready-to-eat products;
● introduced more than 100 new SKUs under our private
labels;
● continued the digital transformation of the chain
through the development of a variety
of IT infrastructure projects and the implementation
of new software programs;
● DA! continued to optimise the supply chain in order
to provide a better customer experience;
● as part of our logistics optimisation, DA! expanded
its storage capacities for dry food products by renting
additional space of 10 thousand m2 at one of O’KEY
Group’s distribution centre in Moscow region; and
● modernised the lighting in DA! stores.
In our discounters’ marketing policy, we strive to get
closer to our customers and seek to meet all their
changing preferences. According to the latest marketing
research, our main customers are represented by young
families with dependent children or young childless
families, as well as working families of middle and older
age with a middle level of income. All of them are partly
promo-oriented but are willing to try fashionable new
products. Likewise, 68% of our assortment is evaluated
by customers as optimal and mostly good, which is 17%
higher than the average figures in the whole discounter
segment.
DA! discounters’ profit from synergies with O’KEY
hypermarkets in procurement, imports and relations
with suppliers and producers, which is mainly the result
of increased purchasing power, maintaining the economies
of scale effect, as well as improving the quality
of the goods we source.
To ensure robust growth, DA! discounters remained
focused on managing their balanced assortment and own
brand portfolio and continued offering the best value
for money to the customers.
In terms of our approach towards collaboration
with suppliers we strive to work directly
with manufacturers rather than with importers
and distributors. We also aim to build long-term
partnerships with our suppliers for our private labels,
while our own brand product sales often exceed
even A-branded product sales. On the other hand,
we contribute to the development of local manufacturers
by tapping into synergies with them and ensuring large-
scale purchases.
Fresh Offer
DA! discounters keep up with the general trend towards
fresh and ultra-fresh products, offering a wide range
of dairy, fresh meat and poultry, fruits and vegetables.
In 2023, the share of fruits and vegetables, fresh
and ultra-fresh products in the discounter’s sales mix
exceeded 60%.
Our range of fresh products includes own brand SKUs,
some of them under the “farm label” which represents
regional and traditional production of outstanding quality.
Another feature of our discounters is a wide (over 40 SKUs)
range of freshly baked pastries. In order to ensure freshness
of our goods, we practice direct import and deliver fruits
and vegetables to all our stores on daily basis.
Private Labels
and Own Production
We strive to offer all relevant private labels across all
our product range (with the exceptions of cigarettes,
sensitive goods and baby food) in order to motivate our
customers to recurrent visits to our shops. We have
achieved impressive results in optimising our operating
and advertising costs and applying the EDLP concept.
Therefore, our private label products are less expensive
than popular alternatives of comparable quality. We also
enhance constantly our supply chain, giving emphasis
to cost generating functions and passing all cost-saving
advantages to our customers while maintaining good
margins. All these factors enable us to build an appealing
customer value preposition and maintain relatively lower
prices than our competitors in the Russian discounter
format.
DA! own brands:
20–30 %
cheaper than branded products
of the same quality
We are focused on the prudent selection of our own
brands manufacturers and strive to develop long-term
mutually beneficial collaborations with them in order
to provide an impeccable quality of goods and ensure
perfect packaging design close or similar to the branded
assortment. To ensure all our private label manufacturers
meet the highest quality standards, we only work
with innovative manufacturers that share our commitment
to quality.
Developing Own Brand
1
Thorough selection
of manufacturers —
innovative young
companies ready
to offer a special quality
product at the best
price and to meet our
requirements
2
Joint development
of product
and packaging, close
or similar to branded
assortment in terms
of quality
3
Strict quality
control
Private label (PL) products remain one of the key drivers
of DA!’s financial results and show better sales growth
than our branded products. In 2023, PLs accounted
for around 50% of DA! revenue. We are continuously
working on extending the range, improving the quality
and packaging of our own branded products. In 2023,
we introduced more than 100 SKUs. Our assortment
of private label SKUs reached 1,367 SKUs. For our private
label, we use more than 90 registered brands that
are used as umbrella brands for different categories
and quality levels.
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Statements 2023
Products Under Our Private Labels (Brands)
49.9 %
share in DA! revenue in 2023
1,367 SKUs
under own brands
39.2 %
share in number of SKUs
More than
100
private label SKUs was introduced
and improved recipes
We will do our upmost to further optimise and extend the private
label assortment, improve its quality and strengthen our positioning.
Quality and Safety
Another important feature of our DA! discounters’
network is the constant excellent quality of goods
in all stores. We aim to win the trust of our customers
through the freshness and quality of our product range,
maintaining an efficient quality management system, which
encompasses all stages of operations and is improved
on an ongoing basis. We strictly follow all provisions
of Russian legislation in terms of quality and safety,
as well as the requirements of the HACCP system.
The main focus of our attention is impeccable quality
of our private label products. In addition to complying
with all requirements provided by legislation
and the related standards, we conduct quality audits of all
our private label suppliers and their products.
Our private label products’ producers undergo external
audit according to the Global Food Safety Initiative
(GFSI) requirements. The GFSI is a business-driven
initiative for the continuous improvement of food safety
management systems with the ambition to ensure
confidence in the delivery of safe food to consumers
worldwide. The GFSI include the definition and control
of the minimum requirements for food safety certification
programmes and a robust benchmarking process.
GFSI benchmarking and recognition of existing private
standards is actively used for food safety certification
programmes with the objective to enhance confidence,
acceptance and implementation of third-party
certification along with the entire food supply chain.
The frequency of these audits depends on the results
of the previous audits and on the assessment
of the potential risks. We also arrange laboratory checks
with a frequency varying from one to twelve per year,
based on the potential risk of the product category
and on precise product features.
Supply Chain
DA! maintains smooth operations across all its supply chain
and stores, which enables us to ensure the robust growth
of our network and to quickly meet the bulk of customers’
needs. In the reporting year we continued to improve
the productivity and effectiveness of our supply chain
by applying the best digital solutions, improving both
collaboration with suppliers and our logistic capabilities.
The DA! supply chain includes one own distribution
centre, which is designed to serve a large number
of stores efficiently. The distribution centre with an area
of 60 thousand m2 is based in Stupino district
of the Moscow Region and provide services for all 220
DA! stores. We also operate two external warehouses
located in the Moscow Region and used for long-term
storage. In 2023, DA! expanded its storage space for dry
food products renting additional 10 thousand m2 at one
of O’KEY distribution centres in the Moscow Region.
We deliver products in the fresh, vegetable and fruit
categories on a daily basis with no stockholding
at our warehouse. This unique delivery model helps us
to maintain a high level of freshness and the utmost
product availability across our discounters. DA! logistics
is fully centralised with 100% centralisation rate.
Plans
In 2024, we plan:
● to focus on further improvement of our customer
proposition at optimal prices;
● to enlarge the range of ultra-fresh products based on
customer surveys;
● to continue to optimise our internal processes to
further improve business efficiency;
● to take measures to even more strengthen our price
positioning compared to the competitors; and
● to continue modernisation of trade equipment and
in-store lighting.
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Financial
Statements 2023
49.9 %
share in DA! revenue in 2023
1,367 SKUs
under own brands
39.2 %
share in number of SKUs
More than
100
private label SKUs was introduced
and improved recipes
We will do our upmost to further optimise and extend the private
label assortment, improve its quality and strengthen our positioning.
Quality and Safety
Another important feature of our DA! discounters’
network is the constant excellent quality of goods
in all stores. We aim to win the trust of our customers
through the freshness and quality of our product range,
maintaining an efficient quality management system, which
encompasses all stages of operations and is improved
on an ongoing basis. We strictly follow all provisions
of Russian legislation in terms of quality and safety,
as well as the requirements of the HACCP system.
The main focus of our attention is impeccable quality
of our private label products. In addition to complying
with all requirements provided by legislation
and the related standards, we conduct quality audits of all
our private label suppliers and their products.
Our private label products’ producers undergo external
audit according to the Global Food Safety Initiative
(GFSI) requirements. The GFSI is a business-driven
initiative for the continuous improvement of food safety
management systems with the ambition to ensure
confidence in the delivery of safe food to consumers
worldwide. The GFSI include the definition and control
of the minimum requirements for food safety certification
programmes and a robust benchmarking process.
GFSI benchmarking and recognition of existing private
standards is actively used for food safety certification
programmes with the objective to enhance confidence,
acceptance and implementation of third-party
certification along with the entire food supply chain.
The frequency of these audits depends on the results
of the previous audits and on the assessment
of the potential risks. We also arrange laboratory checks
with a frequency varying from one to twelve per year,
based on the potential risk of the product category
and on precise product features.
Supply Chain
DA! maintains smooth operations across all its supply chain
and stores, which enables us to ensure the robust growth
of our network and to quickly meet the bulk of customers’
needs. In the reporting year we continued to improve
the productivity and effectiveness of our supply chain
by applying the best digital solutions, improving both
collaboration with suppliers and our logistic capabilities.
The DA! supply chain includes one own distribution
centre, which is designed to serve a large number
of stores efficiently. The distribution centre with an area
of 60 thousand m2 is based in Stupino district
of the Moscow Region and provide services for all 220
DA! stores. We also operate two external warehouses
located in the Moscow Region and used for long-term
storage. In 2023, DA! expanded its storage space for dry
food products renting additional 10 thousand m2 at one
of O’KEY distribution centres in the Moscow Region.
We deliver products in the fresh, vegetable and fruit
categories on a daily basis with no stockholding
at our warehouse. This unique delivery model helps us
to maintain a high level of freshness and the utmost
product availability across our discounters. DA! logistics
is fully centralised with 100% centralisation rate.
Plans
In 2024, we plan:
● to focus on further improvement of our customer
proposition at optimal prices;
● to enlarge the range of ultra-fresh products based on
customer surveys;
● to continue to optimise our internal processes to
further improve business efficiency;
● to take measures to even more strengthen our price
positioning compared to the competitors; and
● to continue modernisation of trade equipment and
in-store lighting.
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Financial
Statements 2023
FINANCIAL
REVIEW
4
O’KEY Group demonstrated solid results in the reporting
year. We were able to maintain a stable performance
in our hypermarket format and continued to improve
operational efficiencies of the discounter segment.
RUB
207.9 bn
Group revenue in 2023
RUB
47.7 bn
Group gross profit in 2023
RUB
17.0 bn
Group EBITDA in 2023
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Corporate Governance
Financial
Statements 2023
REVIEW
4
O’KEY Group demonstrated solid results in the reporting
year. We were able to maintain a stable performance
in our hypermarket format and continued to improve
operational efficiencies of the discounter segment.
RUB
207.9 bn
Group revenue in 2023
RUB
47.7 bn
Group gross profit in 2023
RUB
17.0 bn
Group EBITDA in 2023
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Statements 2023
FY 2023 financial
highlights 1
1 All results are according to IFRS 16, unless stated otherwise.
RUB
207.9 bn
Group revenue
(+2.8% YoY)
RUB
47.7 bn
Group gross profit
(+1.8% YoY)
22.9 %
Group gross margin
RUB
17.0 bn
Group EBITDA
8.2 %
Group EBITDA margin
RUB
12.6 bn
O’KEY hypermarkets
EBITDA
RUB
4.4 bn
DA! discounters EBITDA
(+20.3% YoY)
6.9 %
DA! discounters EBITDA margin
(+0.1 p.p. YoY)
Group profit and losses
highlights in FY 2023
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Financial
Statements 2023
highlights 1
1 All results are according to IFRS 16, unless stated otherwise.
RUB
207.9 bn
Group revenue
(+2.8% YoY)
RUB
47.7 bn
Group gross profit
(+1.8% YoY)
22.9 %
Group gross margin
RUB
17.0 bn
Group EBITDA
8.2 %
Group EBITDA margin
RUB
12.6 bn
O’KEY hypermarkets
EBITDA
RUB
4.4 bn
DA! discounters EBITDA
(+20.3% YoY)
6.9 %
DA! discounters EBITDA margin
(+0.1 p.p. YoY)
Group profit and losses
highlights in FY 2023
| RUB mn | 2023 | 2022 | ∆ YoY, % |
|---|---|---|---|
| Total Group revenue | 207,865 | 202,171 | 2.8% |
| O`KEY | 143,980 | 148,824 | (3.3%) |
| DA! | 63,885 | 53,347 | 19.8% |
| Gross profit | 47,660 | 46,808 | 1.8% |
| • Gross profit margin, % | 22.9% | 23.2% | (0.3 p.p.) |
| Selling, general and administrative expenses | (42,516) | (40,390) | 5.3% |
| • SG&A, % of revenue | 20.5% | 20.0% | 0.5 p.p. |
| Other operating expenses, net | (292) | (667) | (56.3%) |
| Finance costs, net | (7,267) | (5,642) | 28.8% |
| Foreign exchange (loss)/gain | (1,074) | 313 | n/a |
| Net (loss)/profit | (2,878) | 242 | n/a |
| Group EBITDA | 17,026 | 17,020 | - |
| • Group EBITDA margin, % | 8.2% | 8.4% | (0.2 p.p.) |
| O`KEY EBITDA | 12,643 | 13,377 | (5.5%) |
| • O`KEY EBITDA margin, % | 8.8% | 9.0% | (0.2p.p.) |
| DA! EBITDA | 4,383 | 3,643 | 20.3% |
| • DA! EBITDA margin, % | 6.9% | 6.8% | 0.1 p.p. |
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Statements 2023
Group revenue
The Group’s total revenue increased by 2.8% YoY
to RUB 207,865 mn driven by both retail revenue
and rental income. The Group’s retail revenue grew
by 2.8% YoY to RUB 205,772 mn driven by DA! discounters
and online revenue growth in FY 2023. The Group’s
rental income increased by 6.2% YoY to RUB 2,093 mn
in FY 2023.
Group net retail revenue
and LFL revenue in 12M 2023
For more details, please
refer to the Group’s
Q4 2023 Trading Update.
Group gross profit
In FY 2023, the Group’s gross profit increased
by 1.8% YoY to RUB 47,660 mn, mainly on the back
of reduced shrinkage costs and increased rental income,
offset partially by increased logistics costs. The Group’s
gross margin decreased by 0.3 p.p. YoY to 22.9%
in FY 2023, mainly due to the abovementioned increase
in logistics costs, as a percentage of revenue.
Group selling, general
and administrative expenses
The Group’s total SG&A expenses increased by 5.3% YoY
to RUB 42,516 mn in FY 2023. SG&A expenses,
as a percentage of revenue, rose by 0.5 p.p. YoY to 20.5%
in FY 2023. The increase was mainly due to the temporary
increase in personnel costs, communication and utilities,
and repair and maintenance expenses, as a percentage
of revenue, related to the discounters’ segment growth.
In FY 2023, personnel costs increased by 4.7% YoY
to RUB 17,649 mn and, as a percentage of revenue,
by 0.2 p.p. YoY to 8.5%. The growth was mainly associated
with new discounter openings and salary indexation.
Communication and utilities expenses grew
by 16.7% YoY to RUB 5,355 mn, and by 0.3 p.p. YoY
as a percentage of revenue in FY 2023, mainly
due to tariffs inflation and discounter chain growth.
Repairs and maintenance expenses increased
by 12.5% YoY to RUB 1,780 mn, and by 0.1 p.p. YoY
as a percentage of revenue in FY 2023, largely as a result
of the discounters’ chain growth.
The Group’s EBITDA stood almost flat YoY
at RUB 17,026 mn, while EBITDA margin decreased
by 0.2 p.p. YoY to 8.2% in FY 2023.
Net finance costs increased by 28.8% YoY
to RUB 7,267 mn, mainly due to a growth of weighted
average interest rate. A substantial part of interest
costs was attributable to non-current lease liabilities
(in accordance with IFRS 16).
In FY 2023, net foreign exchange loss amounted
to RUB 1,074 mn compared to a RUB 313 mn gain
in FY 2022. The loss resulted from Russian rouble
devaluation in FY 2023, and was largely attributable
to intragroup US dollar-denominated loans,
as well as lease contracts denominated in foreign
currencies. Losses from import operations had a relatively
small impact on the Group’s results. Net foreign exchange
loss has a non-cash nature.
Consequently, the Group reported a RUB 2,878 mn net
loss in FY 2023 compared to the profit of RUB 242 mn
in FY 2022.
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Statements 2023
| RUB mn | 2023 | 2022 | ∆ YoY, % |
|---|---|---|---|
| Group total revenue | 207,865 | 202,171 | 2.8% |
| Retail revenue | 205,772 | 200,201 | 2.8% |
| Rental income | 2,093 | 1,970 | 6.2% |
The Group’s total revenue increased by 2.8% YoY
to RUB 207,865 mn driven by both retail revenue
and rental income. The Group’s retail revenue grew
by 2.8% YoY to RUB 205,772 mn driven by DA! discounters
and online revenue growth in FY 2023. The Group’s
rental income increased by 6.2% YoY to RUB 2,093 mn
in FY 2023.
Group net retail revenue
and LFL revenue in 12M 2023
| RUB mln | 2023 | 2022 | YoY, % | LFL, % |
|---|---|---|---|---|
| O`KEY Group | 205,772 | 200,201 | 2.8% | (1.6%) |
| O`KEY hypermarkets | 141,947 | 146,904 | (3.4%) | (3.3%) |
| DA! discounters | 63,825 | 53,297 | 19.8% | 3.0% |
For more details, please
refer to the Group’s
Q4 2023 Trading Update.
Group gross profit
In FY 2023, the Group’s gross profit increased
by 1.8% YoY to RUB 47,660 mn, mainly on the back
of reduced shrinkage costs and increased rental income,
offset partially by increased logistics costs. The Group’s
gross margin decreased by 0.3 p.p. YoY to 22.9%
in FY 2023, mainly due to the abovementioned increase
in logistics costs, as a percentage of revenue.
Group selling, general
and administrative expenses
| RUB mn | 2023 | % of revenue | 2022 | % of revenue | ∆ YoY, p.p. |
|---|---|---|---|---|---|
| Personnel costs | 17,649 | 8.5% | 16,850 | 8.3% | 0.2 |
| Depreciation and amortisation | 11,069 | 5.3% | 10,662 | 5.3% | - |
| Communication and utilities | 5,355 | 2.6% | 4,587 | 2.3% | 0.3 |
| Advertising and marketing | 2,200 | 1.1% | 2,296 | 1.1% | - |
| Repairs and maintenance | 1,780 | 0.9% | 1,582 | 0.8% | 0.1 |
| Insurance and bank commissions | 1,348 | 0.6% | 1,260 | 0.6% | - |
| Security expenses | 771 | 0.4% | 785 | 0.4% | - |
| Operating taxes | 718 | 0.3% | 766 | 0.4% | (0.1) |
| Legal and professional expenses | 674 | 0.3% | 651 | 0.3% | - |
| Materials and supplies | 441 | 0.2% | 460 | 0.2% | - |
| Operating leases | 440 | 0.2% | 448 | 0.2% | - |
| Other costs | 74 | 0.0% | 43 | 0.0% | - |
| Total SG&A expenses | 42,516 | 20.5% | 40,390 | 20.0% | 0.5 |
The Group’s total SG&A expenses increased by 5.3% YoY
to RUB 42,516 mn in FY 2023. SG&A expenses,
as a percentage of revenue, rose by 0.5 p.p. YoY to 20.5%
in FY 2023. The increase was mainly due to the temporary
increase in personnel costs, communication and utilities,
and repair and maintenance expenses, as a percentage
of revenue, related to the discounters’ segment growth.
In FY 2023, personnel costs increased by 4.7% YoY
to RUB 17,649 mn and, as a percentage of revenue,
by 0.2 p.p. YoY to 8.5%. The growth was mainly associated
with new discounter openings and salary indexation.
Communication and utilities expenses grew
by 16.7% YoY to RUB 5,355 mn, and by 0.3 p.p. YoY
as a percentage of revenue in FY 2023, mainly
due to tariffs inflation and discounter chain growth.
Repairs and maintenance expenses increased
by 12.5% YoY to RUB 1,780 mn, and by 0.1 p.p. YoY
as a percentage of revenue in FY 2023, largely as a result
of the discounters’ chain growth.
The Group’s EBITDA stood almost flat YoY
at RUB 17,026 mn, while EBITDA margin decreased
by 0.2 p.p. YoY to 8.2% in FY 2023.
Net finance costs increased by 28.8% YoY
to RUB 7,267 mn, mainly due to a growth of weighted
average interest rate. A substantial part of interest
costs was attributable to non-current lease liabilities
(in accordance with IFRS 16).
In FY 2023, net foreign exchange loss amounted
to RUB 1,074 mn compared to a RUB 313 mn gain
in FY 2022. The loss resulted from Russian rouble
devaluation in FY 2023, and was largely attributable
to intragroup US dollar-denominated loans,
as well as lease contracts denominated in foreign
currencies. Losses from import operations had a relatively
small impact on the Group’s results. Net foreign exchange
loss has a non-cash nature.
Consequently, the Group reported a RUB 2,878 mn net
loss in FY 2023 compared to the profit of RUB 242 mn
in FY 2022.
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Financial
Statements 2023
Group cash flow
1 Short-term debt does not include interest accrued on loans and borrowings.
Net cash from operating activities amounted
to RUB 15,276 mn in FY 2023 compared to RUB 12,958 mn
cash from operating activities in FY 2022. The increase
resulted from revenue growth and efficient working
capital management.
Net cash used in investing activities amounted
to RUB 4,341 mn in FY 2023, showing a decrease
in comparison with RUB 6,468 mn of cash used in FY 2022.
In FY 2023, the Group invested over RUB 2,000 mn
(excluding VAT) in hypermarket business development
and store renovation, and over RUB 2,800 mn (excluding
VAT) in the development of its discounter business.
Net cash used in financing activities amounted
to RUB 11,158 mn in FY 2023 compared to RUB 3,885 mn
in FY 2022. The dynamics resulted from the Group’s
regular credit portfolio refinancing in FY 2023.
As of 31 December 2023, the Group had RUB 16,560 mn
of available credit lines in Russian roubles with fixed
and floating interest rates, in respect of which all
conditions have been met. If necessary, proceeds
from these facilities may be used to finance operating
and investing activities.
Group net debt position
As of 31 December 2023, the total interest-bearing
liabilities (net of cash) to EBITDA ratio grew
to 3.66x from 3.30x as of 31 December 2022, mainly
due to an increase in long-term debt and lease liabilities.
The Group’s audited
consolidated IFRS report
The Group’s audited report,
including the full set
of audited IFRS financial
statements, can be found
online.
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| RUB mn | 2023 | 2022 |
|---|---|---|
| Net cash from operating activities | 15,276 | 12,958 |
| Net cash (used in) investing activities | (4,341) | (6,468) |
| Net cash (used in) financing activities | (11,158) | (3,885) |
| Net (decrease) / increase in cash and cash equivalents | (223) | 2,605 |
| Effect of exchange rate on cash and cash equivalents | (30) | (274) |
1 Short-term debt does not include interest accrued on loans and borrowings.
Net cash from operating activities amounted
to RUB 15,276 mn in FY 2023 compared to RUB 12,958 mn
cash from operating activities in FY 2022. The increase
resulted from revenue growth and efficient working
capital management.
Net cash used in investing activities amounted
to RUB 4,341 mn in FY 2023, showing a decrease
in comparison with RUB 6,468 mn of cash used in FY 2022.
In FY 2023, the Group invested over RUB 2,000 mn
(excluding VAT) in hypermarket business development
and store renovation, and over RUB 2,800 mn (excluding
VAT) in the development of its discounter business.
Net cash used in financing activities amounted
to RUB 11,158 mn in FY 2023 compared to RUB 3,885 mn
in FY 2022. The dynamics resulted from the Group’s
regular credit portfolio refinancing in FY 2023.
As of 31 December 2023, the Group had RUB 16,560 mn
of available credit lines in Russian roubles with fixed
and floating interest rates, in respect of which all
conditions have been met. If necessary, proceeds
from these facilities may be used to finance operating
and investing activities.
Group net debt position
| RUB mn | As of 31 December 2023 | As of 31 December 2022 |
|---|---|---|
| EBITDA | 17,026 | 17,020 |
| Total debt | 47,131 | 45,486 |
| Short-term debt 1 | 6,003 | 9,961 |
| Long-term debt | 41,128 | 35,525 |
| Cash & cash equivalents | 11,526 | 11,779 |
| Net debt | 35,606 | 33,707 |
| Total lease liabilities | 26,722 | 22,545 |
| Short-term lease liabilities | 5,962 | 5,621 |
| Long-term lease liabilities | 20,760 | 16,924 |
| Total interest-bearing liabilities (net of сash & сashequivalents) | 62,328 | 56,251 |
| Total interest-bearing liabilities (net of сash & сashequivalents) / EBITDA | 3.66x | 3.30x |
As of 31 December 2023, the total interest-bearing
liabilities (net of cash) to EBITDA ratio grew
to 3.66x from 3.30x as of 31 December 2022, mainly
due to an increase in long-term debt and lease liabilities.
The Group’s audited
consolidated IFRS report
The Group’s audited report,
including the full set
of audited IFRS financial
statements, can be found
online.
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CORPORATE
GOVERNANCE
5
O’KEY Group maintains its commitment to creating shareholder value.
O’KEY Group S.A. has a primary listing of its GDRs
on the London Stock Exchange and the Moscow Exchange,
and a secondary listing on the Astana International Exchange.
since
2010 on LSE
since
2020 on MOEX
since
2023 on AIX
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GOVERNANCE
5
O’KEY Group maintains its commitment to creating shareholder value.
O’KEY Group S.A. has a primary listing of its GDRs
on the London Stock Exchange and the Moscow Exchange,
and a secondary listing on the Astana International Exchange.
since
2010 on LSE
since
2020 on MOEX
since
2023 on AIX
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Corporate
Governance System
O’KEY GROUP S.A. is a company incorporated under the Laws
of the Grand Duchy of Luxembourg with Global Depositary
Receipts (GDRs) listed on the London Stock Exchange, the Moscow
Exchange and the Astana International Exchange, and as such
is not required to comply with the UK Corporate Governance
Code and the Russian Corporate Governance Code.
O’KEY Group is committed to managing and conducting
its operations in accordance with the applicable regula-
tions of Luxembourg, and the London Stock Exchange,
the Moscow Exchange and the Astana International
Exchange with respect to disclosure under the Rules.
We recognise our obligation to our shareholders to adopt
the highest standards of governance and control, both
at the Board level and within our management teams,
and we aim to establish and support a corporate gov-
ernance framework that is suitable for the development
of our business and that meets the requirements of our
shareholders.
The most significant decisions affecting the life
of the Company and the rights of shareholders, includ-
ing the approval of financial statements and the Annual
Report, the appointment of Directors, the amendments
to the Articles of Incorporation (hereinafter, the Articles)
and the approval of the final dividend for the financial
year are subject to review and approval at the Meeting
of Shareholders.
The Board of Directors and its committees provide over-
all guidance for the business and strategic planning
for the Group. It sets strategic goals and oversees their
implementation by the CEO and senior Management
of the Group.
The Management Board and the Chief Executive Officer
are responsible for the day-to-day operations of the com-
panies of the Group and implement the strategy approved
by the Board of Directors.
Our Corporate Governance
Principles:
Professionalism
We strive to appoint individuals with relevant skills
and experience to the Board of Directors and its commit-
tees in order to enable them to carry out their respec-
tive duties and responsibilities effectively. The Board
is supplied, in a timely manner, with information in a form
and of a quality appropriate to allow it to perform
its duties.
Accountability
The Board of Directors is accountable to O’KEY Group’s
General Meeting of Shareholders and is responsible for:
● formulating the Group’s strategy;
● establishing and maintaining systems which ensure
due consideration of key decisions by experienced
individuals, including in the areas of remuneration
and incentives, internal control, and risk management;
and
● holding the management accountable for the success-
ful implementation of the Group’s strategy.
Equality
O’KEY Group’s corporate governance system is designed
to protect the shareholders’ rights and ensure equal
treatment of all shareholders.
Transparency
We strive to ensure the appropriate disclosure of reliable
information on all significant issues related to our opera-
tions, including financial status, social performance, oper-
ating results, and ownership.
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Governance System
O’KEY GROUP S.A. is a company incorporated under the Laws
of the Grand Duchy of Luxembourg with Global Depositary
Receipts (GDRs) listed on the London Stock Exchange, the Moscow
Exchange and the Astana International Exchange, and as such
is not required to comply with the UK Corporate Governance
Code and the Russian Corporate Governance Code.
O’KEY Group is committed to managing and conducting
its operations in accordance with the applicable regula-
tions of Luxembourg, and the London Stock Exchange,
the Moscow Exchange and the Astana International
Exchange with respect to disclosure under the Rules.
We recognise our obligation to our shareholders to adopt
the highest standards of governance and control, both
at the Board level and within our management teams,
and we aim to establish and support a corporate gov-
ernance framework that is suitable for the development
of our business and that meets the requirements of our
shareholders.
The most significant decisions affecting the life
of the Company and the rights of shareholders, includ-
ing the approval of financial statements and the Annual
Report, the appointment of Directors, the amendments
to the Articles of Incorporation (hereinafter, the Articles)
and the approval of the final dividend for the financial
year are subject to review and approval at the Meeting
of Shareholders.
The Board of Directors and its committees provide over-
all guidance for the business and strategic planning
for the Group. It sets strategic goals and oversees their
implementation by the CEO and senior Management
of the Group.
The Management Board and the Chief Executive Officer
are responsible for the day-to-day operations of the com-
panies of the Group and implement the strategy approved
by the Board of Directors.
Our Corporate Governance
Principles:
Professionalism
We strive to appoint individuals with relevant skills
and experience to the Board of Directors and its commit-
tees in order to enable them to carry out their respec-
tive duties and responsibilities effectively. The Board
is supplied, in a timely manner, with information in a form
and of a quality appropriate to allow it to perform
its duties.
Accountability
The Board of Directors is accountable to O’KEY Group’s
General Meeting of Shareholders and is responsible for:
● formulating the Group’s strategy;
● establishing and maintaining systems which ensure
due consideration of key decisions by experienced
individuals, including in the areas of remuneration
and incentives, internal control, and risk management;
and
● holding the management accountable for the success-
ful implementation of the Group’s strategy.
Equality
O’KEY Group’s corporate governance system is designed
to protect the shareholders’ rights and ensure equal
treatment of all shareholders.
Transparency
We strive to ensure the appropriate disclosure of reliable
information on all significant issues related to our opera-
tions, including financial status, social performance, oper-
ating results, and ownership.
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General Meeting
of Shareholders
The General Meeting of Shareholders is O’KEY GROUP
S.A.’s supreme governing body. The General Meetings
of Shareholders are convened and held in accordance
with Luxembourg legislative requirements and the Articles
of O’KEY GROUP S.A. According to the Articles of O’KEY
GROUP S.A., the annual General Meeting of Shareholders
shall be held within six (6) months of the end of each finan-
cial year in the Grand Duchy of Luxembourg at the reg-
istered office of the Company, or at any such other place
in the Grand Duchy of Luxembourg as may be specified
in the convening notice of the meeting.
The next annual General Meeting of Shareholders will
be held before 30 June 2024. A convening notice specify-
ing the date, time, address of the meeting and the agenda
will be sent and published no later than fourteen days (14)
before the meeting.
Special Control Rights
All the issued and outstanding shares of the Company
have equal voting rights and there are no special control
rights attached to the shares of the Company.
The Caraden Shareholder (as defined in the Articles)
has, under the condition of holding a minimum amount
of shares in the Company, a specific right with respect
to the appointment and removal of Directors as at least
one Director (designated as the Caraden Director)
must be appointed from a list of candidates proposed
by the Caraden Shareholder and may be removed
at the initiative of the Caraden Shareholder (additional
information may be found under Article 8 of the Articles).
The supporting vote of the Caraden Shareholder
is required, under certain conditions, to amend
the provisions of the Articles relating to: (i) the rights
and prerogatives of the Caraden Shareholder; and (ii)
the appointment, removal, replacement, rights, pre-
rogatives, and positive vote of the Caraden Director
(additional information may be found under Article 16.4
of the Articles).
Transfer Restrictions
As of 31 December 2023, and the date hereof,
to the knowledge of the Company all shares in issue
in the Company are freely transferrable, provided
that the transfer formalities set out under Article 6
of the Articles are fulfilled.
Control System in Employee
Share Scheme
The Company does not have an employee share scheme
allowing employees to acquire equity in the Company.
Voting Rights
Each share issued and outstanding in the Company bears
one vote.
The Articles do not provide for any voting restrictions.
In accordance with the Articles, a record date
for the admission to a general meeting of shareholders may
be set by the Board (Article 15 of the Articles). Only those
shareholders as the shareholders on any such record date
shall be entitled to be notified of and to vote at any general
meeting and any adjournment thereof, or to give any such
consent, as the case may be.
In accordance with the Articles, the Board may determine
such other conditions that must be fulfilled by sharehold-
ers for them to take part in any meeting of shareholders
in person or by proxy (Article 15 of the Articles).
Shareholders’ Agreements
with Transfer Restrictions
The Company has no information about any agreements
between shareholders, which may result in restrictions
on the transfer of securities or voting rights.
Appointment of the Directors,
Amendment of the Articles
The rules governing the appointment and replacement
of the directors and the amendment of the Articles are set
out under Luxembourg Company Law and the Articles
(in particular, Articles 8, 15, and 16).
The consolidated version of the Articles is published
under the Shareholders section of the Company web-
site and is available at: https:/ /okeygroup.lu/investors/
shareholders/documents/
Significant Agreements
or Essential Business Contracts
The Board is not aware of any significant agreements
to which O’KEY GROUP S.A. is a party and which take
effect, alter or terminate upon a change of control
of the Company following a takeover bid. The Board has
considered essential business contracts and has con-
cluded that there are not any significant agreements.
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of Shareholders
The General Meeting of Shareholders is O’KEY GROUP
S.A.’s supreme governing body. The General Meetings
of Shareholders are convened and held in accordance
with Luxembourg legislative requirements and the Articles
of O’KEY GROUP S.A. According to the Articles of O’KEY
GROUP S.A., the annual General Meeting of Shareholders
shall be held within six (6) months of the end of each finan-
cial year in the Grand Duchy of Luxembourg at the reg-
istered office of the Company, or at any such other place
in the Grand Duchy of Luxembourg as may be specified
in the convening notice of the meeting.
The next annual General Meeting of Shareholders will
be held before 30 June 2024. A convening notice specify-
ing the date, time, address of the meeting and the agenda
will be sent and published no later than fourteen days (14)
before the meeting.
Special Control Rights
All the issued and outstanding shares of the Company
have equal voting rights and there are no special control
rights attached to the shares of the Company.
The Caraden Shareholder (as defined in the Articles)
has, under the condition of holding a minimum amount
of shares in the Company, a specific right with respect
to the appointment and removal of Directors as at least
one Director (designated as the Caraden Director)
must be appointed from a list of candidates proposed
by the Caraden Shareholder and may be removed
at the initiative of the Caraden Shareholder (additional
information may be found under Article 8 of the Articles).
The supporting vote of the Caraden Shareholder
is required, under certain conditions, to amend
the provisions of the Articles relating to: (i) the rights
and prerogatives of the Caraden Shareholder; and (ii)
the appointment, removal, replacement, rights, pre-
rogatives, and positive vote of the Caraden Director
(additional information may be found under Article 16.4
of the Articles).
Transfer Restrictions
As of 31 December 2023, and the date hereof,
to the knowledge of the Company all shares in issue
in the Company are freely transferrable, provided
that the transfer formalities set out under Article 6
of the Articles are fulfilled.
Control System in Employee
Share Scheme
The Company does not have an employee share scheme
allowing employees to acquire equity in the Company.
Voting Rights
Each share issued and outstanding in the Company bears
one vote.
The Articles do not provide for any voting restrictions.
In accordance with the Articles, a record date
for the admission to a general meeting of shareholders may
be set by the Board (Article 15 of the Articles). Only those
shareholders as the shareholders on any such record date
shall be entitled to be notified of and to vote at any general
meeting and any adjournment thereof, or to give any such
consent, as the case may be.
In accordance with the Articles, the Board may determine
such other conditions that must be fulfilled by sharehold-
ers for them to take part in any meeting of shareholders
in person or by proxy (Article 15 of the Articles).
Shareholders’ Agreements
with Transfer Restrictions
The Company has no information about any agreements
between shareholders, which may result in restrictions
on the transfer of securities or voting rights.
Appointment of the Directors,
Amendment of the Articles
The rules governing the appointment and replacement
of the directors and the amendment of the Articles are set
out under Luxembourg Company Law and the Articles
(in particular, Articles 8, 15, and 16).
The consolidated version of the Articles is published
under the Shareholders section of the Company web-
site and is available at: https:/ /okeygroup.lu/investors/
shareholders/documents/
Significant Agreements
or Essential Business Contracts
The Board is not aware of any significant agreements
to which O’KEY GROUP S.A. is a party and which take
effect, alter or terminate upon a change of control
of the Company following a takeover bid. The Board has
considered essential business contracts and has con-
cluded that there are not any significant agreements.
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Board of Directors
1 The rules governing the appointment and replacement of the Directors are set out under the Law on Commercial Companies dated
10 August 1915, as amended, and the Articles (in particular, Articles 8, 15, and 16). The consolidated version of the Articles is published under
the Shareholders section of the Company website, available at: https://okeygroup.lu/investors/shareholders/documents/
The Company’s Board of Directors (the Board) plays
the key role in organising an efficient corporate governance
system. The Board is vested with the broadest powers
to manage the business of the Company and to authorise
and perform all acts of disposal and administration falling
within the purposes of the Company.
The Board is responsible for taking strategic deci-
sions in respect to the operation and development
of the Group, as well as overseeing the risk management
and internal audit functions of the Group. The decisions
related to the day-to-day operations of the Group are del-
egated to the management.
The Board is also a management body of O’KEY GROUP
S.A. and is authorised to take all decisions in respect
to O’KEY GROUP S.A., unless they are reserved
for the General Meeting of Shareholders. The Board
is not authorised to issue or buy back shares without
the approval of the shareholders meeting. The repurchase
by the Company of its own shares is subject to the condi-
tions set out in the Company Law and the Articles. There
are five members of our Board, including one independent
director. The General Meeting of Shareholders appoints
the Board members by a simple majority of votes cast,
for a period not exceeding six years or until their successors
are elected 1
.
Our current Board of Directors was elected
at the General Meeting of Shareholders held
on 13 October 2015 and re-appointed on 24 June 2020.
Meetings of the Board of Directors
Meetings of the Board of Directors are held regularly in com-
pliance with the approved work schedule for the year.
The Board’s work schedule is determined on the basis of stra-
tegic planning and the reporting cycle. Whenever an urgent
matter needs to be considered, Extraordinary Board meetings
are organised, or, if a personal meeting cannot be organised
due to a short notice, the Board can adopt a circular resolu-
tion by a unanimous vote. It is the Board Chairman’s respon-
sibility to determine the Board’s work plan and to include
additional items in the plan.
In 2023, the Board of Directors worked on the following key
tasks:
● preparation of the financial statements and annual
report, and review of the results for the year 2022;
● approval of the budget and business strategy
for the year 2023;
● review of the quarterly financial results, approval
of financial statements for six months of 2023, and mon-
itoring of compliance with risk management strategy,
and
● determination of the Group’s strategic and operational
priorities.
Information about the members of the Board
of Directors of O’KEY GROUP S.A.
as at 31 December 2023 is available at the Company’s
website at https://www.okeygroup.lu/about/
corporate-governance/committees/.
Meetings of the Board of Directors
Committees
of the Board
of Directors
The primary role of the Committees is to provide assistance
to the Board in preparing and adopting decisions
in its respective functional areas, as well as to ensure
that matters brought for consideration by the Board
of Directors are scrutinised prior to the Board meetings.
There are two committees on the Board of Directors:
the Audit Committee and the Remuneration Committee.
Audit Committee
Audit Committee members
As of 31 December 2023, the Audit Committee comprised:
● Mykola Buinyckyi, Committee Chairman, Independent
Director of the Board of Directors;
● Boris Volchek, Committee Member, Non-executive
Director of the Board of Directors;
● Dmitry Korzhev, Committee Member, Non-executive
Director of the Board of Directors;
● Heigo Kera, Committee Member, Chairman
of the Board of Directors;
● Ilya Ilin, Committee Member, Non-director, external
consultant; and
● Irina Nikiforova, Committee Member, Non-director,
external consultant.
Key Areas
The Audit Committee oversees the internal audit func-
tion, the effectiveness of risk management, and the internal
controls of the Company and the Group. It also approves
and monitors the performance of the internal audit plan
for the year. The Audit Committee assists the Board
of Directors in fulfilling its oversight responsibilities relating
to the financial statements, including periodically reporting
to the Board of Directors on its activities and the adequacy
of internal control systems over financial reporting.
According to the Statute of the O’KEY Audit Committee,
the Audit Committee shall consist of not fewer than three
current members of the Board of Directors and shall
be chaired by an independent director.
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1 The rules governing the appointment and replacement of the Directors are set out under the Law on Commercial Companies dated
10 August 1915, as amended, and the Articles (in particular, Articles 8, 15, and 16). The consolidated version of the Articles is published under
the Shareholders section of the Company website, available at: https://okeygroup.lu/investors/shareholders/documents/
The Company’s Board of Directors (the Board) plays
the key role in organising an efficient corporate governance
system. The Board is vested with the broadest powers
to manage the business of the Company and to authorise
and perform all acts of disposal and administration falling
within the purposes of the Company.
The Board is responsible for taking strategic deci-
sions in respect to the operation and development
of the Group, as well as overseeing the risk management
and internal audit functions of the Group. The decisions
related to the day-to-day operations of the Group are del-
egated to the management.
The Board is also a management body of O’KEY GROUP
S.A. and is authorised to take all decisions in respect
to O’KEY GROUP S.A., unless they are reserved
for the General Meeting of Shareholders. The Board
is not authorised to issue or buy back shares without
the approval of the shareholders meeting. The repurchase
by the Company of its own shares is subject to the condi-
tions set out in the Company Law and the Articles. There
are five members of our Board, including one independent
director. The General Meeting of Shareholders appoints
the Board members by a simple majority of votes cast,
for a period not exceeding six years or until their successors
are elected 1
.
Our current Board of Directors was elected
at the General Meeting of Shareholders held
on 13 October 2015 and re-appointed on 24 June 2020.
Meetings of the Board of Directors
Meetings of the Board of Directors are held regularly in com-
pliance with the approved work schedule for the year.
The Board’s work schedule is determined on the basis of stra-
tegic planning and the reporting cycle. Whenever an urgent
matter needs to be considered, Extraordinary Board meetings
are organised, or, if a personal meeting cannot be organised
due to a short notice, the Board can adopt a circular resolu-
tion by a unanimous vote. It is the Board Chairman’s respon-
sibility to determine the Board’s work plan and to include
additional items in the plan.
In 2023, the Board of Directors worked on the following key
tasks:
● preparation of the financial statements and annual
report, and review of the results for the year 2022;
● approval of the budget and business strategy
for the year 2023;
● review of the quarterly financial results, approval
of financial statements for six months of 2023, and mon-
itoring of compliance with risk management strategy,
and
● determination of the Group’s strategic and operational
priorities.
Information about the members of the Board
of Directors of O’KEY GROUP S.A.
as at 31 December 2023 is available at the Company’s
website at https://www.okeygroup.lu/about/
corporate-governance/committees/.
Meetings of the Board of Directors
| Member | Board of Directors(2 meetings) | Audit Committee (5 meetings) | Remuneration Committee(1 meeting) |
|---|---|---|---|
| Heigo Kera | 2 attended | 5 attended | Attended |
| Dmitrii Troitskii | 2 by proxy | not a member | by proxy |
| Dmitry Korzhev | 2 attended | 5 attended | not a member |
| Boris Volchek | 2 by proxy | 3 attended,2 by proxy | by proxy |
| Mykola Buinyckyi | 2 attended | 5 attended | not a member |
Committees
of the Board
of Directors
The primary role of the Committees is to provide assistance
to the Board in preparing and adopting decisions
in its respective functional areas, as well as to ensure
that matters brought for consideration by the Board
of Directors are scrutinised prior to the Board meetings.
There are two committees on the Board of Directors:
the Audit Committee and the Remuneration Committee.
Audit Committee
Audit Committee members
As of 31 December 2023, the Audit Committee comprised:
● Mykola Buinyckyi, Committee Chairman, Independent
Director of the Board of Directors;
● Boris Volchek, Committee Member, Non-executive
Director of the Board of Directors;
● Dmitry Korzhev, Committee Member, Non-executive
Director of the Board of Directors;
● Heigo Kera, Committee Member, Chairman
of the Board of Directors;
● Ilya Ilin, Committee Member, Non-director, external
consultant; and
● Irina Nikiforova, Committee Member, Non-director,
external consultant.
Key Areas
The Audit Committee oversees the internal audit func-
tion, the effectiveness of risk management, and the internal
controls of the Company and the Group. It also approves
and monitors the performance of the internal audit plan
for the year. The Audit Committee assists the Board
of Directors in fulfilling its oversight responsibilities relating
to the financial statements, including periodically reporting
to the Board of Directors on its activities and the adequacy
of internal control systems over financial reporting.
According to the Statute of the O’KEY Audit Committee,
the Audit Committee shall consist of not fewer than three
current members of the Board of Directors and shall
be chaired by an independent director.
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The Committee’s remit includes:
● reviewing the IFRS financial statements for integrity
and transparency;
● analysing financial reporting processes, includ-
ing carrying out regular reviews and making
recommendations;
● recommending the appointment and remunera-
tion of the Company’s external auditor to the Board
of Directors and maintaining an ongoing relationship
with the external auditor; and
● analysing and supporting the internal audit system
and risk management procedures, including drafting
recommendations for their improvement.
Activities in 2023
During the reporting period, the Audit Committee held
five meetings where it:
● fulfilled oversight responsibilities relating to the integ-
rity of the Company’s annual financial statements;
● fulfilled oversight responsibilities relating to the integ-
rity of the Company’s half yearly financial statements;
● reviewed reports prepared by the Internal Audit
department;
● reviewed the effectiveness of the Company’s risk man-
agement and internal control systems;
● reviewed policies and procedures published
by the Company;
● monitored reports per the Company’s Whistleblowing
Policy;
● planned and agreed the scope of the audit of financial
statements for year ended 2023 with the external audi-
tor of O’KEY Group;
● reviewed and approved provisions of non-audit ser-
vices for the Company by the external auditor; and
● approved the Internal Audit plan for the year 2023.
Plans for 2024
The Audit Committee and the Company continue to focus
on the following areas in 2024:
● monitoring the compliance with the Group’s risk
management policies and procedures, and the ade-
quacy of the risk management framework in relation
to the risks faced by the Group; and
● optimising internal business processes involved
in the preparation of financial reporting.
Remuneration Committee
Committee members
● Heigo Kera, Committee Chairman, Chairman
of the Board of Directors;
● Boris Volchek, Committee Member, Non-executive
Director of the Board of Directors;
● Dmitrii Troitskii, Committee Member, Non-executive
Director of the Board of Directors;
● Ilya Ilin, Committee Member, Non-director, external
consultant; and
● Irina Nikiforova, Committee Member, Non-director,
external consultant.
The Committee’s remit includes:
● reviewing the compensation policy;
● advising on any benefit or incentive schemes; and
● making proposals to the full Board of Directors regard-
ing the remuneration of Executive Directors and manage-
ment (including the Chief Executive Officer).
Activities in 2023:
During the reporting period, the Remuneration
Committee held one meeting where it:
● reviewed the report on the remuneration, bonuses
and expenses of the Board:
● reviewed the amount of remuneration to be allocated
to the management of the Group in 2023;
● approved the Remuneration Committee Report; and
● suggested the total maximum amount of remuneration
of Directors for 2023 and 1H of 2024 to be submitted
for the approval of the shareholders of the Company.
Plans for 2024:
In 2024, the Group plans to keep the remuneration
and bonus policy in line with 2023.
Remuneration
Members of the Board of Directors of O’KEY GROUP
S.A. receive remuneration of the amount approved
by the General Meeting of Shareholders. Members
of the Board and its Committees may be compensated
for the expenses they incur in the course of their duties,
in accordance with the business and travel expenses pol-
icy of O’KEY GROUP S.A.
Diversity
O’KEY Group is working on the adoption of a diver-
sity policy. However, as can be seen from the informa-
tion on the senior management team, O’KEY Group
aims to employ the members of the team most suitable
and qualified for their post and function, irrespective
of their age, gender, or origin. The requirements of educa-
tional and professional backgrounds are such as to ensure
that the members of the team possess the skills and expe-
rience necessary to perform their functions effectively.
74 – 75 Annual Report Overview
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● reviewing the IFRS financial statements for integrity
and transparency;
● analysing financial reporting processes, includ-
ing carrying out regular reviews and making
recommendations;
● recommending the appointment and remunera-
tion of the Company’s external auditor to the Board
of Directors and maintaining an ongoing relationship
with the external auditor; and
● analysing and supporting the internal audit system
and risk management procedures, including drafting
recommendations for their improvement.
Activities in 2023
During the reporting period, the Audit Committee held
five meetings where it:
● fulfilled oversight responsibilities relating to the integ-
rity of the Company’s annual financial statements;
● fulfilled oversight responsibilities relating to the integ-
rity of the Company’s half yearly financial statements;
● reviewed reports prepared by the Internal Audit
department;
● reviewed the effectiveness of the Company’s risk man-
agement and internal control systems;
● reviewed policies and procedures published
by the Company;
● monitored reports per the Company’s Whistleblowing
Policy;
● planned and agreed the scope of the audit of financial
statements for year ended 2023 with the external audi-
tor of O’KEY Group;
● reviewed and approved provisions of non-audit ser-
vices for the Company by the external auditor; and
● approved the Internal Audit plan for the year 2023.
Plans for 2024
The Audit Committee and the Company continue to focus
on the following areas in 2024:
● monitoring the compliance with the Group’s risk
management policies and procedures, and the ade-
quacy of the risk management framework in relation
to the risks faced by the Group; and
● optimising internal business processes involved
in the preparation of financial reporting.
Remuneration Committee
Committee members
● Heigo Kera, Committee Chairman, Chairman
of the Board of Directors;
● Boris Volchek, Committee Member, Non-executive
Director of the Board of Directors;
● Dmitrii Troitskii, Committee Member, Non-executive
Director of the Board of Directors;
● Ilya Ilin, Committee Member, Non-director, external
consultant; and
● Irina Nikiforova, Committee Member, Non-director,
external consultant.
The Committee’s remit includes:
● reviewing the compensation policy;
● advising on any benefit or incentive schemes; and
● making proposals to the full Board of Directors regard-
ing the remuneration of Executive Directors and manage-
ment (including the Chief Executive Officer).
Activities in 2023:
During the reporting period, the Remuneration
Committee held one meeting where it:
● reviewed the report on the remuneration, bonuses
and expenses of the Board:
● reviewed the amount of remuneration to be allocated
to the management of the Group in 2023;
● approved the Remuneration Committee Report; and
● suggested the total maximum amount of remuneration
of Directors for 2023 and 1H of 2024 to be submitted
for the approval of the shareholders of the Company.
Plans for 2024:
In 2024, the Group plans to keep the remuneration
and bonus policy in line with 2023.
Remuneration
Members of the Board of Directors of O’KEY GROUP
S.A. receive remuneration of the amount approved
by the General Meeting of Shareholders. Members
of the Board and its Committees may be compensated
for the expenses they incur in the course of their duties,
in accordance with the business and travel expenses pol-
icy of O’KEY GROUP S.A.
Diversity
O’KEY Group is working on the adoption of a diver-
sity policy. However, as can be seen from the informa-
tion on the senior management team, O’KEY Group
aims to employ the members of the team most suitable
and qualified for their post and function, irrespective
of their age, gender, or origin. The requirements of educa-
tional and professional backgrounds are such as to ensure
that the members of the team possess the skills and expe-
rience necessary to perform their functions effectively.
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Risk Management
We believe that effective risk management underpins
the successful delivery of our strategy. So the Company’s
goals will be achieved in a timely manner and the level
of risks faced by the Group remains acceptable for man-
agement and shareholders. Our unified approach to risk
management through the Group Risk Standard is sup-
ported by formal policies and procedures, clearly del-
egated authority levels, and comprehensive reporting.
As of the date of the approval of this Annual Report, our
framework is integrated into both our business planning
and viability assessment processes.
Our Board of Directors is ultimately responsible
for the Group’s risk management and internal controls
with a view to maintaining the Group’s risk management
framework. The Group’s Audit Committee is responsible
for the regular review/audit of the Group’s operations,
activities, systems and processes, in order to evalu-
ate and provide reasonable, independent, and objec-
tive assurance and consulting services designed to add
value and improve the Group’s operations. Internal Audit
assists the Group’s Audit Committee in its oversight role.
Internal Audit undertakes both regular and ad hoc reviews
of risk management controls and procedures and reports
its findings and recommendations to the Audit Committee.
The Group, through its training and management stan-
dards and procedures, aims to develop a disciplined
and constructive control environment in which all employ-
ees understand their roles and obligations. Identified risk
areas are monitored quarterly and followed by a coordi-
nated improvement programme.
The current situation places new challenges
for the Russian economy, the business community,
and O’KEY Group in particular. Our well-balanced business
model offers a significant hedge against market volatility.
The above key factors have been reviewed in the context
of our current position and strategic plan. Nevertheless,
due to the current unprecedented global geopoliti-
cal and economic turbulence, we withhold from identify-
ing and assessing the key risks that could have a material
adverse effect on our business.
Principle Risks
Below we are describing the key risks that could
have a material adverse effect on our business, our finan-
cial and operational performance and, as a result, could
affect our share price and our reputation. Additional risks
not known to us or those risks that we currently consider
immaterial may also impair our business operations. We do
not expect to incur any risks that may jeopardise the con-
tinuity of our business.
# Name of Risk Definition & Potential Impact
1 Economic outlook Our business may be affected by uncertainties associated with changing economic conditions, partic-
ularly in the current environment of global economic instability, including oil prices, financial markets
volatility, as well as substantial currency exchange fluctuations. Therefore, we may face reduced cus-
tomer demand as the income and purchasing power of our customers’ decreases under the impact
of the weaker macroeconomic environment exacerbated by declining oil prices and sustained rouble
volatility.
2 Competition risk The retail sector in Russia is highly competitive. We face strong competition from other retailers
(Russian and international), some of which are larger and have greater resources. Retail chains compete
mainly over store locations, product ranges, price, service, and store conditions. Some competitors
might be more effective and faster in capturing certain market opportunities, which in turn may nega-
tively impact our market share and our ability to achieve our performance and expansion targets.
3 Political risk Political developments may adversely affect the macroeconomic environment and the market in which
our Company operates. The current geopolitical situation and global economics turbulence may affect
companies across all the sectors of the Russian economy, including our business.
4 Regulatory risk Our operations are subject to various government regulations and industry specific legislation
with respect to quality, packaging, health and safety, labelling, distribution and other standards. Some
regulations are still being developed in Russia. Current and future government regulations or changes
thereto may require us to change the way we run our operations and could result in cost increases.
Failure to comply with regulations can also lead to reputational damage.
5 Changing customer
expectations
We strive to provide our customers with a wide range of goods and services, at competitive prices.
However, we recognise that our customers’ shopping habits and expectations are influenced
by the economic environment and will change over time.
6 Employee recruit-
ment and retention
Competition for highly qualified management and store personnel remains intense in Russia. To meet
our expansion plans, we need highly skilled employees. Our future success depends in part on our con-
tinued ability to hire and retain new employees. We understand that any inability to attract and retain
highly qualified employees and key personnel in the future could have a material adverse effect on our
business.
7 Supply chain risk Our financial performance depends in part on reliable and effective supply chain management. We rely
on third parties to supply us with merchandise and services. The third parties that supply us with mer-
chandise and services also have other customers and may not have sufficient capacity to meet all
of their customers’ needs, including ours, during periods of excess demand. Shortages and delays could
materially harm our business. Unanticipated increases in prices could also adversely affect our perfor-
mance. Furthermore, we may be exposed to risk of delays and interruptions to our supply chain because
of natural disasters in case we are unable to identify alternative sources of supply in a timely manner.
8 IT Platform
Development
Execution of our strategic targets requires adaptation of current IT infrastructure to the changing
business needs. As the business grows, the complexity of processes supporting it and the diversity
of tasks around such growth are increasing. Delayed or inappropriate decisions on the development
of the infrastructure can lead to failures in meeting Group goals and impede attainment of longer-term
goals.
9 IT security threats We are observing an increase in IT security threats and higher levels of professionalism in computer
crime. Our systems and solutions, as well as those of our counterparties remain potentially vulnera-
ble to attacks. Depending on their nature and scope, such attacks could potentially lead to the leakage
of confidential information, improper use of our systems, manipulation and destruction of data, sales
downtimes and supply shortages, which in turn could adversely affect our reputation, competitiveness,
and business, financial and operational performance.
10 Providing sufficient
level of financing
Recent changes in the macroeconomic situation might result in a liquidity squeeze and tightening
of lending policies by Russian banks. Given the expansion programme in the coming periods, issues
with availability of external financing or significant changes in its cost can negatively impact our Group’s
ability to execute its expansion programme.
Board of Directors
● Holds overall responsibility
for the establishment
and oversight of the Group’s
risk management framework
Internal Audit
● Assists the Group’s Audit
Committee in its oversight role
● Undertakes both regular
and ad hoc reviews of risk
management controls
and procedures, the results
of which are reported
to Audit Committee
Audit Committee
● Oversees how management
monitors compliance with
the Group’s risk management
policies and procedures
● Reviews the adequacy
of the risk management
framework in relation
to the risks faced by the Group
Executive management
(CEO and Management Board)
● Oversees implementation
of, and adherence to, risk
management policies
● Monitors and manages risks
relevant to job function
● Carries out risk identification
and reporting
● Performs operational
risk management
76 – 77 Annual Report Overview
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We believe that effective risk management underpins
the successful delivery of our strategy. So the Company’s
goals will be achieved in a timely manner and the level
of risks faced by the Group remains acceptable for man-
agement and shareholders. Our unified approach to risk
management through the Group Risk Standard is sup-
ported by formal policies and procedures, clearly del-
egated authority levels, and comprehensive reporting.
As of the date of the approval of this Annual Report, our
framework is integrated into both our business planning
and viability assessment processes.
Our Board of Directors is ultimately responsible
for the Group’s risk management and internal controls
with a view to maintaining the Group’s risk management
framework. The Group’s Audit Committee is responsible
for the regular review/audit of the Group’s operations,
activities, systems and processes, in order to evalu-
ate and provide reasonable, independent, and objec-
tive assurance and consulting services designed to add
value and improve the Group’s operations. Internal Audit
assists the Group’s Audit Committee in its oversight role.
Internal Audit undertakes both regular and ad hoc reviews
of risk management controls and procedures and reports
its findings and recommendations to the Audit Committee.
The Group, through its training and management stan-
dards and procedures, aims to develop a disciplined
and constructive control environment in which all employ-
ees understand their roles and obligations. Identified risk
areas are monitored quarterly and followed by a coordi-
nated improvement programme.
The current situation places new challenges
for the Russian economy, the business community,
and O’KEY Group in particular. Our well-balanced business
model offers a significant hedge against market volatility.
The above key factors have been reviewed in the context
of our current position and strategic plan. Nevertheless,
due to the current unprecedented global geopoliti-
cal and economic turbulence, we withhold from identify-
ing and assessing the key risks that could have a material
adverse effect on our business.
Principle Risks
Below we are describing the key risks that could
have a material adverse effect on our business, our finan-
cial and operational performance and, as a result, could
affect our share price and our reputation. Additional risks
not known to us or those risks that we currently consider
immaterial may also impair our business operations. We do
not expect to incur any risks that may jeopardise the con-
tinuity of our business.
# Name of Risk Definition & Potential Impact
1 Economic outlook Our business may be affected by uncertainties associated with changing economic conditions, partic-
ularly in the current environment of global economic instability, including oil prices, financial markets
volatility, as well as substantial currency exchange fluctuations. Therefore, we may face reduced cus-
tomer demand as the income and purchasing power of our customers’ decreases under the impact
of the weaker macroeconomic environment exacerbated by declining oil prices and sustained rouble
volatility.
2 Competition risk The retail sector in Russia is highly competitive. We face strong competition from other retailers
(Russian and international), some of which are larger and have greater resources. Retail chains compete
mainly over store locations, product ranges, price, service, and store conditions. Some competitors
might be more effective and faster in capturing certain market opportunities, which in turn may nega-
tively impact our market share and our ability to achieve our performance and expansion targets.
3 Political risk Political developments may adversely affect the macroeconomic environment and the market in which
our Company operates. The current geopolitical situation and global economics turbulence may affect
companies across all the sectors of the Russian economy, including our business.
4 Regulatory risk Our operations are subject to various government regulations and industry specific legislation
with respect to quality, packaging, health and safety, labelling, distribution and other standards. Some
regulations are still being developed in Russia. Current and future government regulations or changes
thereto may require us to change the way we run our operations and could result in cost increases.
Failure to comply with regulations can also lead to reputational damage.
5 Changing customer
expectations
We strive to provide our customers with a wide range of goods and services, at competitive prices.
However, we recognise that our customers’ shopping habits and expectations are influenced
by the economic environment and will change over time.
6 Employee recruit-
ment and retention
Competition for highly qualified management and store personnel remains intense in Russia. To meet
our expansion plans, we need highly skilled employees. Our future success depends in part on our con-
tinued ability to hire and retain new employees. We understand that any inability to attract and retain
highly qualified employees and key personnel in the future could have a material adverse effect on our
business.
7 Supply chain risk Our financial performance depends in part on reliable and effective supply chain management. We rely
on third parties to supply us with merchandise and services. The third parties that supply us with mer-
chandise and services also have other customers and may not have sufficient capacity to meet all
of their customers’ needs, including ours, during periods of excess demand. Shortages and delays could
materially harm our business. Unanticipated increases in prices could also adversely affect our perfor-
mance. Furthermore, we may be exposed to risk of delays and interruptions to our supply chain because
of natural disasters in case we are unable to identify alternative sources of supply in a timely manner.
8 IT Platform
Development
Execution of our strategic targets requires adaptation of current IT infrastructure to the changing
business needs. As the business grows, the complexity of processes supporting it and the diversity
of tasks around such growth are increasing. Delayed or inappropriate decisions on the development
of the infrastructure can lead to failures in meeting Group goals and impede attainment of longer-term
goals.
9 IT security threats We are observing an increase in IT security threats and higher levels of professionalism in computer
crime. Our systems and solutions, as well as those of our counterparties remain potentially vulnera-
ble to attacks. Depending on their nature and scope, such attacks could potentially lead to the leakage
of confidential information, improper use of our systems, manipulation and destruction of data, sales
downtimes and supply shortages, which in turn could adversely affect our reputation, competitiveness,
and business, financial and operational performance.
10 Providing sufficient
level of financing
Recent changes in the macroeconomic situation might result in a liquidity squeeze and tightening
of lending policies by Russian banks. Given the expansion programme in the coming periods, issues
with availability of external financing or significant changes in its cost can negatively impact our Group’s
ability to execute its expansion programme.
Board of Directors
● Holds overall responsibility
for the establishment
and oversight of the Group’s
risk management framework
Internal Audit
● Assists the Group’s Audit
Committee in its oversight role
● Undertakes both regular
and ad hoc reviews of risk
management controls
and procedures, the results
of which are reported
to Audit Committee
Audit Committee
● Oversees how management
monitors compliance with
the Group’s risk management
policies and procedures
● Reviews the adequacy
of the risk management
framework in relation
to the risks faced by the Group
Executive management
(CEO and Management Board)
● Oversees implementation
of, and adherence to, risk
management policies
● Monitors and manages risks
relevant to job function
● Carries out risk identification
and reporting
● Performs operational
risk management
76 – 77 Annual Report Overview
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Financial
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#
Name of Risk
Definition & Potential Impact
11 Tax regulations Russian tax law has complex tax rules, which may be interpreted in different ways and tax rules
are subject to frequent changes. Examinations by tax authorities and changes in tax regulations could
adversely affect our business, and financial and operational performance.
Changes in tax law could result in higher tax expense and payments. Furthermore, legislative changes
could materially impact tax receivables and liabilities as well as deferred tax assets and deferred tax
liabilities.
12 Changes in working
capital
Inability to control and manage elements of the working capital can result in negative changes
for the operating cash flow and lead to liquidity gaps and excessive reliance on external financing.
13 Risk of misstate-
ments in financial
statements
We face exposure to risks relating to failures in proper financial reporting and the classification
of accounting entries, and risks of making inaccurate accounting estimates.
14 Risks of currency
and interest rates
volatility
We are exposed to fluctuations in exchange rates because of loans received in USD and contractual
obligations in USD and EUR. Although measures are taken to minimise this risk, there can be no assur-
ance that exchange rate and interest rate fluctuations will not negatively influence our results.
Internal Control and Risk
Management System
With respect to Internal Control over financial reporting,
our financial procedures include a range of system, trans-
actional and management oversight controls. Regarding
the internal controls in the area of accounting and finan-
cial reporting, the following should be noted:
● Staff involved in the Company’s accounting and finan-
cial reporting is appropriately qualified and kept up-to-
date with relevant changes in International Financial
Reporting Standards (‘IFRS’). Additionally, specific
training and written guidance on particular matters
are provided where needed. Written guidance, regu-
larly updated for business developments and regula-
tory changes, is available to all relevant staff members
and provides a summary of the Company’s accounting
and financial reporting policies and procedures.
● Controls have been established in the processing
of accounting transactions to ensure appropriate
authorisations for transactions, the effective segrega-
tion of duties, and the complete and accurate record-
ing of financial information.
● Completeness and timely recording of financial infor-
mation is ensured through regular reviews, monitor-
ing of specific key performance indicators, validation
procedures by functional leaders and as an additional
check, the process of internal and external audit.
● The Company relies on a comprehensive system
of financial information and oversight. Strategic plans,
business plans, budgets and the interim and full-year
consolidated accounts of the Company are drawn up
and brought to the Board of Directors for approval.
The Board also approves all significant investments.
The Board receives monthly financial reports setting
out the Company’s financial performance in compari-
son to the approved budget and prior year figures.
● Any weaknesses in the system of internal controls
identified by either internal or external auditors
are promptly and fully addressed.
● The external auditors perform a limited review
of the Company’s half-year consolidated financial state-
ments and a full audit of the annual consolidated finan-
cial statements.
In accordance
with the requirements of IFRS,
we disclose detailed information
on the market, credit and foreign
exchange risk to which
it is exposed, as well as strategy
for managing the risks.
Information
for Shareholders
and Investors
Share Capital
O’KEY GROUP S.A. share capital amounts
to EUR 2,690,740, divided into 269,074,000 ordinary
shares of a nominal value of EUR 0.01 each. As of the date
of this Report, the Company’s share capital has remained
unchanged since 30 November 2010.
All shares issued by the Company have equal rights
as provided for by the law on commercial companies
dated 10 August 2015, as amended (the “Company Law”)
and as set forth in the Articles, save for the special rights
granted to the Caraden Shareholder.
The Company does not hold any of its own shares and has
not acquired them during the 2023 financial year.
Significant Shareholdings
As of 31 December 2023, the two major indirect share-
holders of the Group are its founders:
● Mr. Dmitrii Troitskii (who indirectly owns approximately
34.54% of the outstanding share capital of O’KEY
GROUP S.A.), and
● Mr. Boris Volchek (who indirectly owns approximately
34.14% of the outstanding share capital of O’KEY
GROUP S.A.)
Share Capital Structure
as of 31 December 2023 – Direct Holdings:
NISEMAX Co Limited
Free-float and other holders
GSU Limited
49,11
34,14
16,75
78 – 79 Annual Report Overview
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Operational
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Financial
Review Corporate
Governance
Financial
Statements 2023
11 Tax regulations Russian tax law has complex tax rules, which may be interpreted in different ways and tax rules
are subject to frequent changes. Examinations by tax authorities and changes in tax regulations could
adversely affect our business, and financial and operational performance.
Changes in tax law could result in higher tax expense and payments. Furthermore, legislative changes
could materially impact tax receivables and liabilities as well as deferred tax assets and deferred tax
liabilities.
12 Changes in working
capital
Inability to control and manage elements of the working capital can result in negative changes
for the operating cash flow and lead to liquidity gaps and excessive reliance on external financing.
13 Risk of misstate-
ments in financial
statements
We face exposure to risks relating to failures in proper financial reporting and the classification
of accounting entries, and risks of making inaccurate accounting estimates.
14 Risks of currency
and interest rates
volatility
We are exposed to fluctuations in exchange rates because of loans received in USD and contractual
obligations in USD and EUR. Although measures are taken to minimise this risk, there can be no assur-
ance that exchange rate and interest rate fluctuations will not negatively influence our results.
Internal Control and Risk
Management System
With respect to Internal Control over financial reporting,
our financial procedures include a range of system, trans-
actional and management oversight controls. Regarding
the internal controls in the area of accounting and finan-
cial reporting, the following should be noted:
● Staff involved in the Company’s accounting and finan-
cial reporting is appropriately qualified and kept up-to-
date with relevant changes in International Financial
Reporting Standards (‘IFRS’). Additionally, specific
training and written guidance on particular matters
are provided where needed. Written guidance, regu-
larly updated for business developments and regula-
tory changes, is available to all relevant staff members
and provides a summary of the Company’s accounting
and financial reporting policies and procedures.
● Controls have been established in the processing
of accounting transactions to ensure appropriate
authorisations for transactions, the effective segrega-
tion of duties, and the complete and accurate record-
ing of financial information.
● Completeness and timely recording of financial infor-
mation is ensured through regular reviews, monitor-
ing of specific key performance indicators, validation
procedures by functional leaders and as an additional
check, the process of internal and external audit.
● The Company relies on a comprehensive system
of financial information and oversight. Strategic plans,
business plans, budgets and the interim and full-year
consolidated accounts of the Company are drawn up
and brought to the Board of Directors for approval.
The Board also approves all significant investments.
The Board receives monthly financial reports setting
out the Company’s financial performance in compari-
son to the approved budget and prior year figures.
● Any weaknesses in the system of internal controls
identified by either internal or external auditors
are promptly and fully addressed.
● The external auditors perform a limited review
of the Company’s half-year consolidated financial state-
ments and a full audit of the annual consolidated finan-
cial statements.
In accordance
with the requirements of IFRS,
we disclose detailed information
on the market, credit and foreign
exchange risk to which
it is exposed, as well as strategy
for managing the risks.
Information
for Shareholders
and Investors
Share Capital
O’KEY GROUP S.A. share capital amounts
to EUR 2,690,740, divided into 269,074,000 ordinary
shares of a nominal value of EUR 0.01 each. As of the date
of this Report, the Company’s share capital has remained
unchanged since 30 November 2010.
All shares issued by the Company have equal rights
as provided for by the law on commercial companies
dated 10 August 2015, as amended (the “Company Law”)
and as set forth in the Articles, save for the special rights
granted to the Caraden Shareholder.
The Company does not hold any of its own shares and has
not acquired them during the 2023 financial year.
Significant Shareholdings
As of 31 December 2023, the two major indirect share-
holders of the Group are its founders:
● Mr. Dmitrii Troitskii (who indirectly owns approximately
34.54% of the outstanding share capital of O’KEY
GROUP S.A.), and
● Mr. Boris Volchek (who indirectly owns approximately
34.14% of the outstanding share capital of O’KEY
GROUP S.A.)
Share Capital Structure
as of 31 December 2023 – Direct Holdings:
NISEMAX Co Limited
Free-float and other holders
GSU Limited
49,11
34,14
16,75
78 – 79 Annual Report Overview
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Global Depositary Receipts
1 CUSIP (Committee on Uniform Security Identification Procedures) – identification number given to the issue of shares for the purposes
of facilitating clearing.
1 ISIN (International Securities Identification Number) – international identification number of the share.
Global Depositary Receipts (GDRs) are issued in respect
of ordinary shares at a ratio of one ordinary share per one
GDR. The GDRs are listed on the London Stock Exchange
(LSE) since November 2010. In March 2022, LSE temporary
suspended admission to trading for a number of issuers,
including the GDRs of O’KEY GROUP S.A.
In December 2020, the GDRs also were listed and started
trading on the Moscow Exchange (MOEX). In November
2023, the Group changed its listing status from secondary
to primary on MOEX.
In March 2023, the Group also obtained a secondary list-
ing for its GDRs on Astana International Exchange (AIX).
The Company’s depositary bank is the Bank of New York
Mellon.
As of 31 December 2023, GDRs represented 50.22%
of O’KEY GROUP S.A. share capital.
No other securities have been issued by the Company.
Stock Exchange
As of 31 December 2023, O’KEY GROUP S.A. GDRs were
listed on the LSE, the MOEX, and the AIX, and traded
on the MOEX.
Trading Floor of O’KEY GROUP S.A. GDRs
O’KEY GROUP S.A. Securities Identification Numbers
O’KEY GROUP S.A. GDR Price Performance and Trading Volumes on MOEX in 2023
0
5000
10000
15000
20000
Price, RUB Volume, '000 GDRs
03.01.2022 03.02.2022 03.03.2022 03.04.2022 03.05.2022 03.06.2022 03.07.2022 03.08.2022 03.09.2022 03.10.2022 03.11.2022 03.12.2022 0
5
10
15
20
25
30
35
40
45
'000 GDR RUB
Source: Moscow Exchange
O’KEY GROUP S.A. GDRs Trading Information on Moscow Exchange
In 2023, the cumulative trading volume of OKEY GDRs
on MOEX increased by 82.1% compared to 2022.
Source: MOEX, market transactions
Credit Ratings
In June 2023, Expert RA affirmed the Company’s credit
rating of ‘ruA-’ with a stable outlook.
In July 2023, National Credit Rating agency assigned
a credit rating of ‘A.ru’ with a stable outlook to LLC O’KEY,
a main operating subsidiary of O’KEY GROUP S.A.
The ratings reflect the Group’s solid and stable oper-
ational and financial position in the market, low expo-
sure to market risks, and high standards of corporate
governance, risk management, strategic control,
and transparency.
80 – 81 Annual Report Overview
Strategic
Report
Operational
Review
Financial
Review Corporate
Governance
Financial
Statements 2023
1 CUSIP (Committee on Uniform Security Identification Procedures) – identification number given to the issue of shares for the purposes
of facilitating clearing.
1 ISIN (International Securities Identification Number) – international identification number of the share.
Global Depositary Receipts (GDRs) are issued in respect
of ordinary shares at a ratio of one ordinary share per one
GDR. The GDRs are listed on the London Stock Exchange
(LSE) since November 2010. In March 2022, LSE temporary
suspended admission to trading for a number of issuers,
including the GDRs of O’KEY GROUP S.A.
In December 2020, the GDRs also were listed and started
trading on the Moscow Exchange (MOEX). In November
2023, the Group changed its listing status from secondary
to primary on MOEX.
In March 2023, the Group also obtained a secondary list-
ing for its GDRs on Astana International Exchange (AIX).
The Company’s depositary bank is the Bank of New York
Mellon.
As of 31 December 2023, GDRs represented 50.22%
of O’KEY GROUP S.A. share capital.
No other securities have been issued by the Company.
Stock Exchange
As of 31 December 2023, O’KEY GROUP S.A. GDRs were
listed on the LSE, the MOEX, and the AIX, and traded
on the MOEX.
Trading Floor of O’KEY GROUP S.A. GDRs
| Trading floor | Ticker code |
|---|---|
| London Stock Exchange | OKEY |
| Moscow Exchange | OKEY |
| Astana International Exchange | OKEY |
O’KEY GROUP S.A. Securities Identification Numbers
| CUSIP1 | Code |
|---|---|
| Regulation S GDRs | 670866201 |
| Regulation S GDRs | 670866110 |
| Rule 144A GDRs | 670866102 |
| ISIN2 | Code |
| Regulation S GDRs | US6708662019 |
| Regulation S GDRs | US6708661102 |
| Rule 144A GDRs | US6708661029 |
O’KEY GROUP S.A. GDR Price Performance and Trading Volumes on MOEX in 2023
0
5000
10000
15000
20000
Price, RUB Volume, '000 GDRs
03.01.2022 03.02.2022 03.03.2022 03.04.2022 03.05.2022 03.06.2022 03.07.2022 03.08.2022 03.09.2022 03.10.2022 03.11.2022 03.12.2022 0
5
10
15
20
25
30
35
40
45
'000 GDR RUB
Source: Moscow Exchange
O’KEY GROUP S.A. GDRs Trading Information on Moscow Exchange
In 2023, the cumulative trading volume of OKEY GDRs
on MOEX increased by 82.1% compared to 2022.
| 2022 | 2023 | |
|---|---|---|
| Annual maximum price, RUB | 44.98 | 41.11 |
| Annual minimum price, RUB | 17.20 | 24.43 |
| Year-end price, RUB | 24.37 | 29.84 |
| Trading volume (mn GDRs) | 110.9 | 201.9 |
Source: MOEX, market transactions
Credit Ratings
| Expert RA | NCR | |
|---|---|---|
| Credit rating | ruA- | A.ru |
| Outlook | Stable | Stable |
| Last rating date | 21 June 2023 | 27 July 2023 |
In June 2023, Expert RA affirmed the Company’s credit
rating of ‘ruA-’ with a stable outlook.
In July 2023, National Credit Rating agency assigned
a credit rating of ‘A.ru’ with a stable outlook to LLC O’KEY,
a main operating subsidiary of O’KEY GROUP S.A.
The ratings reflect the Group’s solid and stable oper-
ational and financial position in the market, low expo-
sure to market risks, and high standards of corporate
governance, risk management, strategic control,
and transparency.
80 – 81 Annual Report Overview
Strategic
Report
Operational
Review
Financial
Review Corporate
Governance
Financial
Statements 2023
Analyst Coverage
As of the end of 2023, three equity research ana-
lysts from leading Russian banks followed the Company
on a regular basis. O`KEY Group’s IR team monitors
and communicates analyst consensus to the Company’s
top management.
Source: the Company
Dividends
Dividend Policy
To determine the recommended amount of dividends
that will be payable, the Group’s Board of Directors
abides by the Dividend Policy. The General Meeting
of Shareholders, upon the recommendation of the Board
of Directors, determines how the remainder of the annual
net profits of the Company should be disposed of, includ-
ing through stock dividend, it being understood that
the remaining net profits of the Company left after
the payment of dividends shall be used for the busi-
ness development of the Company and its subsidiaries
and the development of the retail business of the Group
in Russia. Interim dividends may be declared and paid
(including through staggered payments) by the Board
of Directors, subject to observing the terms and con-
ditions provided by law either through a cash dividend
or through a dividend in kind.
Taxation
As a rule, the Company withholds 15% WHT from the div-
idend paid from Luxembourg for distribution to the hold-
ers of GDRs.
This information is provided for information purposes only.
Potential and current investors should seek the advice
of professional consultants on tax matters related
to investments in the shares and GDRs of the Company.
Management
& Directors
Responsibility
Statement
We confirm to the best of our knowledge that the con-
solidated financial statements provide a true and fair
view of the assets, liabilities, financial position, and profit
or loss of O’KEY GROUP S.A. and the companies included
in the consolidation as required by the International
Financial Reporting Standards as adopted
by the European Union, and that the consolidated man-
agement report provides a true and fair view of the devel-
opment and performance of the business and the position
of O’KEY GROUP S.A. and the companies included
in the consolidation taken as a whole, and that the consol-
idated management report provides a true and fair view,
and that the consolidated management report describes
the principal risks and uncertainties which O’KEY GROUP
S.A. and the companies included in the consolidation taken
as a whole are exposed to.
Luxembourg, 11 April 2024
Dmitry Korzhev
Member of the Board of Directors
Mykola Buinyckiy
Member of the Board of Directors
Heigo Kera
Chairman of the Board of Directors
Konstantin Arabidis
CЕO
82 – 83 Annual Report Overview
Strategic
Report
Operational
Review
Financial
Review Corporate
Governance
Financial
Statements 2023
As of the end of 2023, three equity research ana-
lysts from leading Russian banks followed the Company
on a regular basis. O`KEY Group’s IR team monitors
and communicates analyst consensus to the Company’s
top management.
| Company | Analyst | Phone number |
|---|---|---|
| Aton | Victor Dima | +7 (495) 213-03-44 |
| Gazprombank | Marat Ibragimov | +7 (495) 980-41-87 |
| Sberbank CIB | Mikhail Krasnoperov | +7 (495) 933-98-38 |
Source: the Company
Dividends
Dividend Policy
To determine the recommended amount of dividends
that will be payable, the Group’s Board of Directors
abides by the Dividend Policy. The General Meeting
of Shareholders, upon the recommendation of the Board
of Directors, determines how the remainder of the annual
net profits of the Company should be disposed of, includ-
ing through stock dividend, it being understood that
the remaining net profits of the Company left after
the payment of dividends shall be used for the busi-
ness development of the Company and its subsidiaries
and the development of the retail business of the Group
in Russia. Interim dividends may be declared and paid
(including through staggered payments) by the Board
of Directors, subject to observing the terms and con-
ditions provided by law either through a cash dividend
or through a dividend in kind.
| Period | Record date | Amount of dividend perGDR (cents, gross) | Amount of accrueddividend (gross) |
|---|---|---|---|
| Interim dividends 2011 | 12.09.2011 | 9.9481 | USD 26,767,750.59 |
| Interim dividends 2012 | 23.02.2012 | 10.254 | USD 27,590,847.96 |
| Interim dividends 2013 | 15.02.2013 | 18.953 | USD 50,997,595.22 |
| Interim dividends 2014 | 18.02.2014 | 22.670 | USD 60,999,075.80 |
| Interim dividends 2014 | 17.10.2014 | 7.433 | USD 20,000,270.42 |
| Interim dividends 2015 | 11.09.2015 | 8.920 | USD 24,001,400.80 |
| Interim dividends 2016 | 08.07.2016 | 8.548 | USD 23,000,445.52 |
| Interim dividends 2017 | 20.01.2017 | 9.167 | USD 24,666,013.58 |
| Interim dividends 2018 | 25.01.2018 | 12.367 | USD 33,276,381.58 |
| Interim dividends 2019 | 03.10.2019 | 0.05635 | USD 15,162,319.90 |
| Interim dividends 2020 | 04.11.2020 | 0.028275 | USD 7,608,067.35 |
| Interim dividends 2021 | Not declared and distributed | ||
| Interim dividends 2022 | 01.08.2022 | EUR 0.03159 | EUR 8,500,047.66 |
| Interim dividends 2023 | Not declared and distributed |
Taxation
As a rule, the Company withholds 15% WHT from the div-
idend paid from Luxembourg for distribution to the hold-
ers of GDRs.
This information is provided for information purposes only.
Potential and current investors should seek the advice
of professional consultants on tax matters related
to investments in the shares and GDRs of the Company.
Management
& Directors
Responsibility
Statement
We confirm to the best of our knowledge that the con-
solidated financial statements provide a true and fair
view of the assets, liabilities, financial position, and profit
or loss of O’KEY GROUP S.A. and the companies included
in the consolidation as required by the International
Financial Reporting Standards as adopted
by the European Union, and that the consolidated man-
agement report provides a true and fair view of the devel-
opment and performance of the business and the position
of O’KEY GROUP S.A. and the companies included
in the consolidation taken as a whole, and that the consol-
idated management report provides a true and fair view,
and that the consolidated management report describes
the principal risks and uncertainties which O’KEY GROUP
S.A. and the companies included in the consolidation taken
as a whole are exposed to.
Luxembourg, 11 April 2024
Dmitry Korzhev
Member of the Board of Directors
Mykola Buinyckiy
Member of the Board of Directors
Heigo Kera
Chairman of the Board of Directors
Konstantin Arabidis
CЕO
82 – 83 Annual Report Overview
Strategic
Report
Operational
Review
Financial
Review Corporate
Governance
Financial
Statements 2023
6
FINANCIAL
STATEMENTS
The Independent Auditors’ Report and the consolidated
financial statements of O’KEY GROUP S.A.
for the year ended 31 December 2023.
84 – 85 Annual Report Overview
Strategic
Report
Operational
Review
Financial
Review Corporate Governance Financial
Statements
2023
FINANCIAL
STATEMENTS
The Independent Auditors’ Report and the consolidated
financial statements of O’KEY GROUP S.A.
for the year ended 31 December 2023.
84 – 85 Annual Report Overview
Strategic
Report
Operational
Review
Financial
Review Corporate Governance Financial
Statements
2023
Key audit matter
How our audit addressed the key audit matter
RECOGNITION OF BONUSES FROM SUPPLIERS
Refer to Notes 4, 20 and 33 to the consolidated
financial statements of the Group.
The Group receives various types of bonuses from
suppliers relating to purchase of goods for resale.
The bonuses are provided in the form of volume dis-
counts, slotting fees and other counter payments.
Recognition of these bonuses leads to a signifi-
cant reduction of the cost of goods sold and inven-
tory value. While the major portion of the bonuses
is recognized and settled within the year, a signif-
icant amount of RUB 1,553,709 thousand remains
outstanding within trade and other receivables
as at the reporting date.
Recognition of bonuses from suppliers that are not
settled as at the reporting date was one of the mat-
ters of most significance in our audit because their
impact on the Group’s cost of goods sold, inventory
and trade and other receivable balances is material,
the number of underlying contracts with suppliers
is large and their terms can be complex. Further,
calculation of the period-end accrual for certain
supplier bonuses and allocation of bonuses to inven-
tory cost requires making estimates and applying
judgments.
Our audit procedures to address the key audit matter included the following:
• Understanding, evaluation of design of relevant control activities that
the Group has established in relation to recognition of bonuses from
suppliers
• Understanding and evaluation of the accounting policy applied by the Group
for accounting for bonuses from suppliers
• Reading significant contracts with suppliers and understanding of the terms
that entitle the Group to bonuses from suppliers
• Performing a retrospective analysis of prior year bonuses receivable against
subsequent settlements to assess accuracy of the Group’s estimates
in the current year
• Performing analytical procedures over the accuracy and existence
of the bonuses recognized in the current year based on historical data
• Agreeing bonuses receivable as at the reporting date to external confirma-
tions obtained from suppliers on a sample basis, or alternative procedures
through tracing the amounts recognized against underlying agreements
and other relevant documentation
• Performing analytical procedures to assess allocation of bonuses
to the goods that remain in stock at the reporting date
• Confirming that the accounting policy for offsetting of bonuses receivable
from suppliers against trade payables is in line with IFRS and that the factual
offsetting is in line with the accounting policy
• Considering adequacy of disclosures of information about the bonuses from
suppliers in the consolidated financial statements of the Group
NON-CURRENT ASSETS IMPAIRMENT ASSESSMENT
Refer to Notes 4, 14, 15 and 16 to the consolidated
financial statements of the Group.
As at 31 December 2023, the carrying value
of the Group’s non-current assets for which IAS 36
requires an assessment of whether there is any indi-
cation of impairment exceeds 55% of total assets.
These non-current assets are primarily attribut-
able to the Group’s stores in operation and groups
of assets held for future stores construction.
As at the reporting date, the Group assessed
whether there is any indication that the carrying
value of the non-current assets may not be recov-
erable or the impairment recognized in prior peri-
ods may not exist or may have decreased and tested
for impairment or reversal of impairment those
cash-generating units (CGUs) represented by indi-
vidual stores and groups of assets held for future
stores construction where such indications were
noted.
As at 31 December 2023 the recoverable amount
of the CGUs was determined based on value in use.
Based on the results of the impairment tests per-
formed as at 31 December 2023 and during the year
ended 31 December 2023, no impairment loss
was identified and recognized.
This is one of the key audit matters due to the mag-
nitude of the carrying value of the non-current
assets that require the assessment of any indication
of impairment, judgement exercised by the Group
in determining whether or not there is a specific
indication of impairment and judgements applied
in the calculation of the recoverable amount of these
assets.
In addition, strong competition in the Russian
retail market, political, economic tension,
due to the Ukraine-Russian crisis underpin the uncer-
tainty of accounting estimates and the risk of signif-
icant adjustments in future periods to the carrying
value of the Group’s non-current assets recognized
in the consolidated financial statements.
Our audit procedures to address the key audit matter included the following:
• We obtained understanding and evaluated the design of the Group’s rele-
vant control activities around the impairment review
• We also considered the Group’s approach to determination of CGUs and
identification of indication that these CGUs represented by the Group’s
stores or groups of assets held for future stores construction may
be impaired or impairment recognised in prior periods may not exist or may
have decreased
• For those significant CGUs where indication of impairment was identified
or where there was an indication that an impairment loss recognized in prior
periods may no longer exist or may have decreased, we assessed whether
the value in use approach applied by the Group to determine recoverable
amount in each particular case is appropriate in the circumstances We fur-
ther obtained and analyzed underlying calculations prepared by the Group
for the impairment tests
Our audit procedures were carried out with the involvement of internal valua-
tion experts and included:
• Reviewing the adequacy and consistency of methods applied to measure-
ment of value in use, and the calculations’ mathematical accuracy
• Evaluating the reasonableness of the Group’s key assumptions and forecasts
in the prior period, in order to assess the accuracy of the Group’s forecasts
for future periods
• Verifying the appropriateness of budgets of the CGUs for projected peri-
ods used in the measurement of value in use through inquiries of the Group,
corroborating the Group’s explanations, examining supporting documenta-
tion and comparing inputs against available external industry data
• Analyzing and assessing in detail the key assumptions that signifi-
cantly affect future cash flows of the CGUs and the discount rate
applied by the Group to measure the recoverable amount, by compar-
ing it to the weighted-average cost of capital determined for the Group
with due regard to its inherent risks, as well as considering whether
the Ukraine-Russian crisis had an impact on these key assumptions by ana-
lyzing the Group’s performance and the Russian retail industry dynamics
in the current year
• Re-performing sensitivity analysis of the results of the Group’s assessment
to reasonably possible changes to key assumptions
We have tested the presentation and disclosure of information about
the impairment test as carried out by the Group in the consolidated financial
statements for its consistency with requirements of IAS 36 and its adequacy
in the context of the consolidated financial statements as a whole.
Independent
Auditors’ Report
To the Shareholders of
O’KEY GROUP S.A.
25C, Boulevard Royal,
L-2449, Luxembourg
MOORE Audit S.A.
5, rue de Turi
L-3378 Livange
T +352 26 26 84 1
F +352 26 26 84 99
E mail@moore-audit.lu
www.moore-audit.lu
MOORE Audit S.A. Société Anonyme - Cabinet de révision agréé. R.C.S. Luxembourg Nr. B 165 462. Capital Social 51.000 EUR MOORE Audit S.A. Société Anonyme - Cabinet de révision agréé. R.C.S. Luxembourg Nr. B 165 462. Capital Social 51.000 EUR
Report of the reviseur
d’entreprises agree
Report on the Audit of the consolidated Financial Statements
Opinion
We have audited the consolidated financial statements
of O’KEY GROUP S.A. (the “Company”) and its subsidiaries
(the “Group”), which comprise the consolidated statement
of financial position as at 31 December 2023, and the con-
solidated statement of comprehensive income, consoli-
dated statement of changes in equity and consolidated
statement of cash flows for the year then ended, and notes
to the consolidated financial statements, including material
accounting policy information.
In our opinion, the accompanying consolidated finan-
cial statements (pages 90 to 131) present fairly, in all
material respects, the consolidated financial position
of the Company as at 31 December 2023, and of its con-
solidated financial performance and its consolidated cash
flows for the year then ended in accordance with IFRS
Accounting Standards as adopted by the European Union.
Basis for Opinion
We conducted our audit in accordance with the Law
of 23 July 2016 on the audit profession (“Law of 23 July
2016”) and with International Standards on Auditing
(“ISAs”) as adopted for Luxembourg by the “Commission de
Surveillance du Secteur Financier” (“CSSF”). Our responsi-
bilities under the Law of 23 July 2016 and ISAs as adopted
for Luxembourg by the CSSF are further described
in the «Responsibilities of “Réviseur d’Entreprises Agréé”
for the Audit of the Consolidated Financial Statements»
section of our report. We are also independent of the Group
in accordance with the International Ethics Standards
Board for Accountants’ Code of Ethics for Professional
Accountants (IESBA Code) as adopted for Luxembourg
by the CSSF together with the ethical requirements that
are relevant to our audit of the consolidated financial state-
ments, and have fulfilled our other ethical responsibilities
under those ethical requirements. We believe that the audit
evidence we have obtained is sufficient and appropriate
to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our profes-
sional judgment, were of most significance in our audit
of the consolidated financial statements of the current
period.
These matters were addressed in the context of the audit
of the consolidated financial statements as a whole, and
in forming our opinion thereon, and we do not provide
a separate opinion on these matters.
86 – 87 Annual Report Overview
Strategic
Report
Operational
Review
Financial
Review Corporate Governance Financial
Statements
2023
RECOGNITION OF BONUSES FROM SUPPLIERS
Refer to Notes 4, 20 and 33 to the consolidated
financial statements of the Group.
The Group receives various types of bonuses from
suppliers relating to purchase of goods for resale.
The bonuses are provided in the form of volume dis-
counts, slotting fees and other counter payments.
Recognition of these bonuses leads to a signifi-
cant reduction of the cost of goods sold and inven-
tory value. While the major portion of the bonuses
is recognized and settled within the year, a signif-
icant amount of RUB 1,553,709 thousand remains
outstanding within trade and other receivables
as at the reporting date.
Recognition of bonuses from suppliers that are not
settled as at the reporting date was one of the mat-
ters of most significance in our audit because their
impact on the Group’s cost of goods sold, inventory
and trade and other receivable balances is material,
the number of underlying contracts with suppliers
is large and their terms can be complex. Further,
calculation of the period-end accrual for certain
supplier bonuses and allocation of bonuses to inven-
tory cost requires making estimates and applying
judgments.
Our audit procedures to address the key audit matter included the following:
• Understanding, evaluation of design of relevant control activities that
the Group has established in relation to recognition of bonuses from
suppliers
• Understanding and evaluation of the accounting policy applied by the Group
for accounting for bonuses from suppliers
• Reading significant contracts with suppliers and understanding of the terms
that entitle the Group to bonuses from suppliers
• Performing a retrospective analysis of prior year bonuses receivable against
subsequent settlements to assess accuracy of the Group’s estimates
in the current year
• Performing analytical procedures over the accuracy and existence
of the bonuses recognized in the current year based on historical data
• Agreeing bonuses receivable as at the reporting date to external confirma-
tions obtained from suppliers on a sample basis, or alternative procedures
through tracing the amounts recognized against underlying agreements
and other relevant documentation
• Performing analytical procedures to assess allocation of bonuses
to the goods that remain in stock at the reporting date
• Confirming that the accounting policy for offsetting of bonuses receivable
from suppliers against trade payables is in line with IFRS and that the factual
offsetting is in line with the accounting policy
• Considering adequacy of disclosures of information about the bonuses from
suppliers in the consolidated financial statements of the Group
NON-CURRENT ASSETS IMPAIRMENT ASSESSMENT
Refer to Notes 4, 14, 15 and 16 to the consolidated
financial statements of the Group.
As at 31 December 2023, the carrying value
of the Group’s non-current assets for which IAS 36
requires an assessment of whether there is any indi-
cation of impairment exceeds 55% of total assets.
These non-current assets are primarily attribut-
able to the Group’s stores in operation and groups
of assets held for future stores construction.
As at the reporting date, the Group assessed
whether there is any indication that the carrying
value of the non-current assets may not be recov-
erable or the impairment recognized in prior peri-
ods may not exist or may have decreased and tested
for impairment or reversal of impairment those
cash-generating units (CGUs) represented by indi-
vidual stores and groups of assets held for future
stores construction where such indications were
noted.
As at 31 December 2023 the recoverable amount
of the CGUs was determined based on value in use.
Based on the results of the impairment tests per-
formed as at 31 December 2023 and during the year
ended 31 December 2023, no impairment loss
was identified and recognized.
This is one of the key audit matters due to the mag-
nitude of the carrying value of the non-current
assets that require the assessment of any indication
of impairment, judgement exercised by the Group
in determining whether or not there is a specific
indication of impairment and judgements applied
in the calculation of the recoverable amount of these
assets.
In addition, strong competition in the Russian
retail market, political, economic tension,
due to the Ukraine-Russian crisis underpin the uncer-
tainty of accounting estimates and the risk of signif-
icant adjustments in future periods to the carrying
value of the Group’s non-current assets recognized
in the consolidated financial statements.
Our audit procedures to address the key audit matter included the following:
• We obtained understanding and evaluated the design of the Group’s rele-
vant control activities around the impairment review
• We also considered the Group’s approach to determination of CGUs and
identification of indication that these CGUs represented by the Group’s
stores or groups of assets held for future stores construction may
be impaired or impairment recognised in prior periods may not exist or may
have decreased
• For those significant CGUs where indication of impairment was identified
or where there was an indication that an impairment loss recognized in prior
periods may no longer exist or may have decreased, we assessed whether
the value in use approach applied by the Group to determine recoverable
amount in each particular case is appropriate in the circumstances We fur-
ther obtained and analyzed underlying calculations prepared by the Group
for the impairment tests
Our audit procedures were carried out with the involvement of internal valua-
tion experts and included:
• Reviewing the adequacy and consistency of methods applied to measure-
ment of value in use, and the calculations’ mathematical accuracy
• Evaluating the reasonableness of the Group’s key assumptions and forecasts
in the prior period, in order to assess the accuracy of the Group’s forecasts
for future periods
• Verifying the appropriateness of budgets of the CGUs for projected peri-
ods used in the measurement of value in use through inquiries of the Group,
corroborating the Group’s explanations, examining supporting documenta-
tion and comparing inputs against available external industry data
• Analyzing and assessing in detail the key assumptions that signifi-
cantly affect future cash flows of the CGUs and the discount rate
applied by the Group to measure the recoverable amount, by compar-
ing it to the weighted-average cost of capital determined for the Group
with due regard to its inherent risks, as well as considering whether
the Ukraine-Russian crisis had an impact on these key assumptions by ana-
lyzing the Group’s performance and the Russian retail industry dynamics
in the current year
• Re-performing sensitivity analysis of the results of the Group’s assessment
to reasonably possible changes to key assumptions
We have tested the presentation and disclosure of information about
the impairment test as carried out by the Group in the consolidated financial
statements for its consistency with requirements of IAS 36 and its adequacy
in the context of the consolidated financial statements as a whole.
Independent
Auditors’ Report
To the Shareholders of
O’KEY GROUP S.A.
25C, Boulevard Royal,
L-2449, Luxembourg
MOORE Audit S.A.
5, rue de Turi
L-3378 Livange
T +352 26 26 84 1
F +352 26 26 84 99
E mail@moore-audit.lu
www.moore-audit.lu
MOORE Audit S.A. Société Anonyme - Cabinet de révision agréé. R.C.S. Luxembourg Nr. B 165 462. Capital Social 51.000 EUR MOORE Audit S.A. Société Anonyme - Cabinet de révision agréé. R.C.S. Luxembourg Nr. B 165 462. Capital Social 51.000 EUR
Report of the reviseur
d’entreprises agree
Report on the Audit of the consolidated Financial Statements
Opinion
We have audited the consolidated financial statements
of O’KEY GROUP S.A. (the “Company”) and its subsidiaries
(the “Group”), which comprise the consolidated statement
of financial position as at 31 December 2023, and the con-
solidated statement of comprehensive income, consoli-
dated statement of changes in equity and consolidated
statement of cash flows for the year then ended, and notes
to the consolidated financial statements, including material
accounting policy information.
In our opinion, the accompanying consolidated finan-
cial statements (pages 90 to 131) present fairly, in all
material respects, the consolidated financial position
of the Company as at 31 December 2023, and of its con-
solidated financial performance and its consolidated cash
flows for the year then ended in accordance with IFRS
Accounting Standards as adopted by the European Union.
Basis for Opinion
We conducted our audit in accordance with the Law
of 23 July 2016 on the audit profession (“Law of 23 July
2016”) and with International Standards on Auditing
(“ISAs”) as adopted for Luxembourg by the “Commission de
Surveillance du Secteur Financier” (“CSSF”). Our responsi-
bilities under the Law of 23 July 2016 and ISAs as adopted
for Luxembourg by the CSSF are further described
in the «Responsibilities of “Réviseur d’Entreprises Agréé”
for the Audit of the Consolidated Financial Statements»
section of our report. We are also independent of the Group
in accordance with the International Ethics Standards
Board for Accountants’ Code of Ethics for Professional
Accountants (IESBA Code) as adopted for Luxembourg
by the CSSF together with the ethical requirements that
are relevant to our audit of the consolidated financial state-
ments, and have fulfilled our other ethical responsibilities
under those ethical requirements. We believe that the audit
evidence we have obtained is sufficient and appropriate
to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our profes-
sional judgment, were of most significance in our audit
of the consolidated financial statements of the current
period.
These matters were addressed in the context of the audit
of the consolidated financial statements as a whole, and
in forming our opinion thereon, and we do not provide
a separate opinion on these matters.
86 – 87 Annual Report Overview
Strategic
Report
Operational
Review
Financial
Review Corporate Governance Financial
Statements
2023
Those charged with governance are responsible for over-
seeing the Group’s financial reporting process.
Responsibilities of the “Réviseur
d’Entreprises Agréé”
for the Audit of the consolidated
Financial Statements
The objectives of our audit are to obtain reasonable assur-
ance about whether the consolidated financial state-
ments as a whole are free from material misstatement,
whether due to fraud or error, and to issue a report
of “Réviseur d’Entreprises Agréé” that includes our opin-
ion. Reasonable assurance is a high level of assurance, but
is not a guarantee that an audit conducted in accordance
with the Law of 23 July 2016 and with ISAs as adopted
for Luxembourg by the CSSF will always detect a material
misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually
or in the aggregate, they could reasonably be expected
to influence the economic decisions of users taken
on the basis of these consolidated financial statements.
As part of an audit in accordance with the Law of 23
July 2016 and with ISAs as adopted for Luxembourg
by the CSSF, we exercise professional judgment and main-
tain professional skepticism throughout the audit. We also:
● Identify and assess the risks of material misstatement
of the consolidated financial statements, whether
due to fraud or error, design and perform audit pro-
cedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to pro-
vide a basis for our opinion. The risk of not detecting
a material misstatement resulting from fraud is higher
than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresen-
tations, or the override of internal control.
● Obtain an understanding of internal control rele-
vant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effec-
tiveness of the Group’s internal control.
● Evaluate the appropriateness of accounting poli-
cies used and the reasonableness of accounting esti-
mates and related disclosures made by the Board
of Directors.
● Conclude on the appropriateness of Board
of Directors’ use of the going concern basis
of accounting and, based on the audit evidence
obtained, whether a material uncertainty exists related
to events or conditions that may cast significant
doubt on the Group’s ability to continue as a going
concern. If we conclude that a material uncertainty
exists, we are required to draw attention in our report
of “Réviseur d’Entreprises Agréé” to the related dis-
closures in the consolidated financial statements or, if
such disclosures are inadequate, to modify our opin-
ion. Our conclusions are based on the audit evidence
obtained up to the date of our report of “Réviseur
d’Entreprises Agréé”. However, future events or con-
ditions may cause the Group to cease to continue
as a going concern.
● Evaluate the overall presentation, structure and con-
tent of the consolidated financial statements, including
the disclosures, and whether the consolidated financial
statements represent the underlying transactions and
events in a manner that achieves fair presentation.
● Obtain sufficient appropriate audit evidence regard-
ing the financial information of the entities and
business activities within the Group to express
an opinion on the consolidated financial statements.
We are responsible for the direction, supervision and
performance of the Group audit. We remain solely
responsible for our audit opinion.
We communicate with those charged with governance
regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including
any significant deficiencies in internal control that we iden-
tify during our audit.
We also provide those charged with governance with
a statement that we have complied with relevant ethical
requirements regarding independence, and to commu-
nicate with them all relationships and other matters that
may reasonably be thought to bear on our independence,
and where applicable, actions taken to eliminate threats
or safeguards applied.
From the matters communicated with those charged
with governance, we determine those matters that were
of most significance in the audit of the consolidated finan-
cial statements of the current period and are therefore
the key audit matters. We describe these matters in our
report unless law or regulation precludes public disclo-
sure about the matter or when, in extremely rare cir-
cumstances, we determine that a matter should not
be communicated in our report because the adverse con-
sequences of doing so would reasonably be expected
to outweigh the public interest benefits of such
commucation.
Key audit matter How our audit addressed the key audit matter
RECOVERABILITY OF DEFERRED TAX ASSETS RECOGNIZED FOR THE CARRYFORWARD OF UNUSED TAX LOSSES
Refer to Notes 4, 12 and 33 to the consolidated
financial statements of the Group.
As at 31 December 2023, the carrying value
of the Group’s deferred tax assets amounts
to RUB 6,082,047 thousand, including
RUB 3,554,526 thousand arising on the accumu-
lated tax losses carried forward by LLC Fresh
Market that develops the Group’s chain of dis-
counter stores under the DA! brand starting from
2015.
A deferred tax asset shall be recognized
for the carryforward of unused tax losses
to the extent that it is probable that future taxable
profit will be available against which the unused tax
losses can be utilized.
The Group performed the assessment of and con-
cluded on the recoverability of the deferred tax
assets. This analysis was based on the long-term
financial projections for LLC Fresh Market, which
includes estimates of its future profits.
This area was significant to our audit because
of the history of tax losses generated by LLC Fresh
Market, the complexity and subjectivity
of the recoverability assessment and long-term
budgeting process, which is based on assump-
tions that are inherently uncertain and affected
by the expected pace of new openings of the dis-
counters. In addition, we considered the overall
impact of the Ukraine crisis on the Russian econ-
omy that increases the degree of uncertainty
of these assumptions.
The audit procedures we have performed to address the key audit matter con-
sisted of the following:
• Understanding and evaluation of design of relevant control activities that
the Group has in place in relation to recognition of current and deferred
income taxes and long-term budget preparation
• Comparing the Group’s forecasts in the long-term budget prepared in prior
year to actual performance to assess adequacy of the Group’s estimates
in the current year
• Assessing accuracy of the deferred tax calculations
• Considering whether there are any limitations to the amount and tim-
ing of utilization of the unused tax loss as established by the Russian tax
legislation
• Obtaining the long-term budget prepared by the Group for LLC Fresh
Market and challenging the expected future profits and assumptions
regarding future earnings as reflected therein, including by comparing
to actual results to date and industry trends
• Considering to what extent the Ukrainian-Russian crisis impacted the per-
formance of LLC Fresh Market in the current year by analyzing its revenue
and consumer behavior, expenses and the pace of new stores openings,
as well as its impact on the ability of the discounters segment to adhere
to the long-term budget
• Analyzing the treatment of differences between accounting and tax books
in the planning of future taxable profit
• Considering adequacy of disclosures on the deferred tax positions and
assumptions used in assessing recoverability of the deferred tax assets
from tax losses carry forward in the consolidated financial statements
Other information
The Board of directors is responsible for the other infor-
mation. The other information comprises the information
stated in the annual report including the directors’ report
but does not include the consolidated financial statements
and our report of “Réviseur d’Entreprises Agréé” thereon.
Our opinion on the consolidated financial statements does
not cover the other information and we do not express
any form of assurance conclusion thereon.
In connection with our audit of the consolidated finan-
cial statements, our responsibility is to read the other
information and, in doing so, consider whether the other
information is materially inconsistent with the consoli-
dated financial statements or our knowledge obtained
in the audit or otherwise appears to be materially mis-
stated. If, based on the work we have performed, we con-
clude that there is a material misstatement of this other
information, we are required to report this fact. We have
nothing to report in this regard.
Responsibilities of the Board
of Directors and Those Charged with
Governance for the consolidated
Financial Statements
The Board of Directors is responsible for the preparation
and fair presentation of the consolidated financial state-
ments in accordance with IFRS Accounting Standards
as adopted by the European Union, and for such internal
control as the Board of Directors determines is necessary
to enable the preparation of consolidated financial state-
ments that are free from material misstatement, whether
due to fraud or error.
In preparing the consolidated financial statements,
the Board of Directors is responsible for assessing
the Group’s ability to continue as a going concern, dis-
closing, as applicable, matters related to going con-
cern and using the going concern basis of accounting
unless the Board of Directors either intends to liquidate
the Group or to cease operations, or has no realistic alter-
native but to do so.
MOORE Audit S.A. Société Anonyme - Cabinet de révision agréé. R.C.S. Luxembourg Nr. B 165 462. Capital Social 51.000 EUR MOORE Audit S.A. Société Anonyme - Cabinet de révision agréé. R.C.S. Luxembourg Nr. B 165 462. Capital Social 51.000 EUR
88 – 89 Annual Report Overview
Strategic
Report
Operational
Review
Financial
Review Corporate Governance Financial
Statements
2023
seeing the Group’s financial reporting process.
Responsibilities of the “Réviseur
d’Entreprises Agréé”
for the Audit of the consolidated
Financial Statements
The objectives of our audit are to obtain reasonable assur-
ance about whether the consolidated financial state-
ments as a whole are free from material misstatement,
whether due to fraud or error, and to issue a report
of “Réviseur d’Entreprises Agréé” that includes our opin-
ion. Reasonable assurance is a high level of assurance, but
is not a guarantee that an audit conducted in accordance
with the Law of 23 July 2016 and with ISAs as adopted
for Luxembourg by the CSSF will always detect a material
misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually
or in the aggregate, they could reasonably be expected
to influence the economic decisions of users taken
on the basis of these consolidated financial statements.
As part of an audit in accordance with the Law of 23
July 2016 and with ISAs as adopted for Luxembourg
by the CSSF, we exercise professional judgment and main-
tain professional skepticism throughout the audit. We also:
● Identify and assess the risks of material misstatement
of the consolidated financial statements, whether
due to fraud or error, design and perform audit pro-
cedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to pro-
vide a basis for our opinion. The risk of not detecting
a material misstatement resulting from fraud is higher
than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresen-
tations, or the override of internal control.
● Obtain an understanding of internal control rele-
vant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effec-
tiveness of the Group’s internal control.
● Evaluate the appropriateness of accounting poli-
cies used and the reasonableness of accounting esti-
mates and related disclosures made by the Board
of Directors.
● Conclude on the appropriateness of Board
of Directors’ use of the going concern basis
of accounting and, based on the audit evidence
obtained, whether a material uncertainty exists related
to events or conditions that may cast significant
doubt on the Group’s ability to continue as a going
concern. If we conclude that a material uncertainty
exists, we are required to draw attention in our report
of “Réviseur d’Entreprises Agréé” to the related dis-
closures in the consolidated financial statements or, if
such disclosures are inadequate, to modify our opin-
ion. Our conclusions are based on the audit evidence
obtained up to the date of our report of “Réviseur
d’Entreprises Agréé”. However, future events or con-
ditions may cause the Group to cease to continue
as a going concern.
● Evaluate the overall presentation, structure and con-
tent of the consolidated financial statements, including
the disclosures, and whether the consolidated financial
statements represent the underlying transactions and
events in a manner that achieves fair presentation.
● Obtain sufficient appropriate audit evidence regard-
ing the financial information of the entities and
business activities within the Group to express
an opinion on the consolidated financial statements.
We are responsible for the direction, supervision and
performance of the Group audit. We remain solely
responsible for our audit opinion.
We communicate with those charged with governance
regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including
any significant deficiencies in internal control that we iden-
tify during our audit.
We also provide those charged with governance with
a statement that we have complied with relevant ethical
requirements regarding independence, and to commu-
nicate with them all relationships and other matters that
may reasonably be thought to bear on our independence,
and where applicable, actions taken to eliminate threats
or safeguards applied.
From the matters communicated with those charged
with governance, we determine those matters that were
of most significance in the audit of the consolidated finan-
cial statements of the current period and are therefore
the key audit matters. We describe these matters in our
report unless law or regulation precludes public disclo-
sure about the matter or when, in extremely rare cir-
cumstances, we determine that a matter should not
be communicated in our report because the adverse con-
sequences of doing so would reasonably be expected
to outweigh the public interest benefits of such
commucation.
Key audit matter How our audit addressed the key audit matter
RECOVERABILITY OF DEFERRED TAX ASSETS RECOGNIZED FOR THE CARRYFORWARD OF UNUSED TAX LOSSES
Refer to Notes 4, 12 and 33 to the consolidated
financial statements of the Group.
As at 31 December 2023, the carrying value
of the Group’s deferred tax assets amounts
to RUB 6,082,047 thousand, including
RUB 3,554,526 thousand arising on the accumu-
lated tax losses carried forward by LLC Fresh
Market that develops the Group’s chain of dis-
counter stores under the DA! brand starting from
2015.
A deferred tax asset shall be recognized
for the carryforward of unused tax losses
to the extent that it is probable that future taxable
profit will be available against which the unused tax
losses can be utilized.
The Group performed the assessment of and con-
cluded on the recoverability of the deferred tax
assets. This analysis was based on the long-term
financial projections for LLC Fresh Market, which
includes estimates of its future profits.
This area was significant to our audit because
of the history of tax losses generated by LLC Fresh
Market, the complexity and subjectivity
of the recoverability assessment and long-term
budgeting process, which is based on assump-
tions that are inherently uncertain and affected
by the expected pace of new openings of the dis-
counters. In addition, we considered the overall
impact of the Ukraine crisis on the Russian econ-
omy that increases the degree of uncertainty
of these assumptions.
The audit procedures we have performed to address the key audit matter con-
sisted of the following:
• Understanding and evaluation of design of relevant control activities that
the Group has in place in relation to recognition of current and deferred
income taxes and long-term budget preparation
• Comparing the Group’s forecasts in the long-term budget prepared in prior
year to actual performance to assess adequacy of the Group’s estimates
in the current year
• Assessing accuracy of the deferred tax calculations
• Considering whether there are any limitations to the amount and tim-
ing of utilization of the unused tax loss as established by the Russian tax
legislation
• Obtaining the long-term budget prepared by the Group for LLC Fresh
Market and challenging the expected future profits and assumptions
regarding future earnings as reflected therein, including by comparing
to actual results to date and industry trends
• Considering to what extent the Ukrainian-Russian crisis impacted the per-
formance of LLC Fresh Market in the current year by analyzing its revenue
and consumer behavior, expenses and the pace of new stores openings,
as well as its impact on the ability of the discounters segment to adhere
to the long-term budget
• Analyzing the treatment of differences between accounting and tax books
in the planning of future taxable profit
• Considering adequacy of disclosures on the deferred tax positions and
assumptions used in assessing recoverability of the deferred tax assets
from tax losses carry forward in the consolidated financial statements
Other information
The Board of directors is responsible for the other infor-
mation. The other information comprises the information
stated in the annual report including the directors’ report
but does not include the consolidated financial statements
and our report of “Réviseur d’Entreprises Agréé” thereon.
Our opinion on the consolidated financial statements does
not cover the other information and we do not express
any form of assurance conclusion thereon.
In connection with our audit of the consolidated finan-
cial statements, our responsibility is to read the other
information and, in doing so, consider whether the other
information is materially inconsistent with the consoli-
dated financial statements or our knowledge obtained
in the audit or otherwise appears to be materially mis-
stated. If, based on the work we have performed, we con-
clude that there is a material misstatement of this other
information, we are required to report this fact. We have
nothing to report in this regard.
Responsibilities of the Board
of Directors and Those Charged with
Governance for the consolidated
Financial Statements
The Board of Directors is responsible for the preparation
and fair presentation of the consolidated financial state-
ments in accordance with IFRS Accounting Standards
as adopted by the European Union, and for such internal
control as the Board of Directors determines is necessary
to enable the preparation of consolidated financial state-
ments that are free from material misstatement, whether
due to fraud or error.
MOORE Audit S.A. Société Anonyme - Cabinet de révision agréé. R.C.S. Luxembourg Nr. B 165 462. Capital Social 51.000 EUR MOORE Audit S.A. Société Anonyme - Cabinet de révision agréé. R.C.S. Luxembourg Nr. B 165 462. Capital Social 51.000 EUR
88 – 89 Annual Report Overview
Strategic
Report
Operational
Review
Financial
Review Corporate Governance Financial
Statements
2023
Consolidated
financial statements
Contents
17. Prepayments 110
33. Significant accounting policies 124
34. Events subsequent to the reporting date 131
Report on Other Legal and Regulatory Requirements
The director’s report (pages 16 to 83) is consistent with
the consolidated financial statements and has been pre-
pared in accordance with applicable legal requirements.
MOORE Audit S.A.
Raphael Loschetter
Réviseur d’Entreprises Agréé
Livange, 11 April 2024
MOORE Audit S.A. Société Anonyme - Cabinet de révision agréé. R.C.S. Luxembourg Nr. B 165 462. Capital Social 51.000 EUR
90 – 91 Annual Report Overview
Strategic
Report
Operational
Review
Financial
Review Corporate Governance Financial
Statements
2023
financial statements
Contents
| Consolidated Statement of Financial Position as at 31 December 2023 | 92 |
|---|---|
| Consolidated Statement of Profit or Loss and Other Comprehensive Income for the year ended 31 December 2023 | 93 |
| Consolidated Statement of Changes in Equity for the year ended 31 December 2023 | 94 |
| Consolidated Statement of Cash Flows for the year ended 31 December 2023 | 95 |
| Notes to the Consolidated Financial Statements for the year ended 31 December 2023 | 96 |
| 1. Background | 96 |
|---|---|
| 2. Basis of preparation | 97 |
| 3. Functional and presentation currency | 97 |
| 4. Use of estimates and judgments | 97 |
| 5. New or revised standards and interpretations adoptedby the Group | 99 |
| 6. Segment information | 99 |
| 7. Principal subsidiaries | 101 |
| 8. General, selling and administrative expenses | 101 |
| 9. Other operating income and expenses, net | 102 |
| 10. Finance income and finance costs | 102 |
| 11. Foreign exchange (loss)/gain | 103 |
| 12. Income tax | 103 |
| 13. Investment property | 106 |
| 14. Property, plant and equipment and construction | |
| in progress | 107 |
| 15. Right-of-use assets | 108 |
| 16. Intangible assets | 109 |
17. Prepayments 110
| 18. Other non-current assets | 110 |
|---|---|
| 19. Inventories | 110 |
| 20. Trade and other receivables | 110 |
| 21. Cash and cash equivalents | 111 |
| 22. Equity | 111 |
| 23. (Loss)/Earnings per share | 111 |
| 24. Loans and borrowings | 112 |
| 25. Lease liabilities | 113 |
| 26. Trade and other payables 27. Reconciliation of movements of liabilities to cash flows | 113 |
| arising from financing activities | 114 |
| 28. Financial risk management | 116 |
| 29. Capital commitments | 121 |
| 30. Contingencies | 121 |
| 31. Related party transactions | 122 |
| 32. Fair value disclosures | 124 |
33. Significant accounting policies 124
34. Events subsequent to the reporting date 131
Report on Other Legal and Regulatory Requirements
The director’s report (pages 16 to 83) is consistent with
the consolidated financial statements and has been pre-
pared in accordance with applicable legal requirements.
MOORE Audit S.A.
Raphael Loschetter
Réviseur d’Entreprises Agréé
Livange, 11 April 2024
MOORE Audit S.A. Société Anonyme - Cabinet de révision agréé. R.C.S. Luxembourg Nr. B 165 462. Capital Social 51.000 EUR
90 – 91 Annual Report Overview
Strategic
Report
Operational
Review
Financial
Review Corporate Governance Financial
Statements
2023
Consolidated Statement of Profit
or Loss and Other Comprehensive
Income for the year ended
31 December 2023
The consolidated statement of profit or loss and other comprehensive income is to be read in conjunction with the notes
to, and forming part of, the consolidated financial statements set out on pages 96 to 131
Consolidated Statement
of Financial Position as at
31 December 2023
The consolidated statement of financial position is to be read in conjunction with the notes to, and forming part of,
the consolidated financial statements set out on pages 96 to 131
92 – 93 Annual Report Overview
Strategic
Report
Operational
Review
Financial
Review Corporate Governance Financial
Statements
2023
or Loss and Other Comprehensive
Income for the year ended
31 December 2023
| ’000 RUB | Note | 2023 | 2022 |
|---|---|---|---|
| Revenue | 6 |
|
|
| Cost of goods sold |
( |
( |
|
| Gross profit |
|
|
|
| General, selling and administrative expenses | 8 |
( |
( |
| Other operating income and (expenses), net | 9 |
( |
( |
| Operating profit |
|
|
|
| Finance income | 10 |
|
|
| Finance costs | 10 |
( |
( |
| Foreign exchange (loss)/gain | 11 |
( |
|
| (Loss)/Profit before income tax |
( |
|
|
| Income tax benefit (expense) | 12 |
|
( |
| (Loss)/Profit for the year |
( |
|
|
| OTHER COMPREHENSIVE INCOME/(LOSS) | |||
| Items that will never be reclassified to profit or loss: | |||
| Exchange differences on translation to presentation currency |
|
( |
|
| Other comprehensive income |
|
|
|
| Other comprehensive income/(loss) for the year, net of incometax |
|
( |
|
| Total comprehensive (loss)/income for the year |
( |
|
|
| (LOSS)/EARNINGS PER SHARE | |||
| Basic and diluted (loss)/earnings per share(in RUB per share) | 23 |
( |
|
The consolidated statement of profit or loss and other comprehensive income is to be read in conjunction with the notes
to, and forming part of, the consolidated financial statements set out on pages 96 to 131
Consolidated Statement
of Financial Position as at
31 December 2023
| ’000 RUB | Note | 31 December 2023 | 31 December 2022 |
|---|---|---|---|
| ASSETS | |||
| Non-current assets | |||
| Investment property | 13 |
|
|
| Property, plant and equipment | 14 |
|
|
| Construction in progress | 14 |
|
|
| Right-of-use assets | 15 |
|
|
| Intangible assets | 16 |
|
|
| Deferred tax assets | 12 |
|
|
| Other non-current assets | 18 |
|
|
| Total non-current assets |
|
|
|
| Current assets | |||
| Inventories | 19 |
|
|
| Trade and other receivables | 20 |
|
|
| Prepaid income tax |
|
|
|
| Prepayments | 17 |
|
|
| Cash and cash equivalents | 21 |
|
|
| Non-current assets held for sale | 13 |
|
|
| Total current assets |
|
|
|
| Total assets |
|
|
|
| EQUITY AND LIABILITIES | |||
| Equity | 22 | ||
| Share capital |
|
|
|
| Legal reserve |
|
|
|
| Additional paid-in capital |
|
|
|
| Retained earnings |
|
|
|
| Translation reserve |
|
|
|
| Total equity |
|
|
|
| Non-current liabilities | |||
| Loans and borrowings | 24 |
|
|
| Lease liabilities | 25 |
|
|
| Deferred tax liabilities | 12 |
|
|
| Total non-current liabilities |
|
|
|
| Current liabilities | |||
| Loans and borrowings | 24 |
|
|
| Interest accrued on loans and borrowings | 24 |
|
|
| Lease liabilities | 25 |
|
|
| Trade and other payables | 26 |
|
|
| Current income tax payable |
|
|
|
| Total current liabilities |
|
|
|
| Total liabilities |
|
|
|
| Total equity and liabilities |
|
|
The consolidated statement of financial position is to be read in conjunction with the notes to, and forming part of,
the consolidated financial statements set out on pages 96 to 131
92 – 93 Annual Report Overview
Strategic
Report
Operational
Review
Financial
Review Corporate Governance Financial
Statements
2023
Consolidated Statement
of Cash Flows for the year
ended 31 December 2023
The consolidated statement of cash flows is to be read in conjunction with the notes to, and forming part of, the consoli-
dated financial statements set out on pages 96 to 131
Consolidated Statement
of Changes in Equity for the year
ended 31 December 2023
The consolidated statement of changes in equity is to be read in conjunction with the notes to, and forming part of,
the consolidated financial statements set out on pages 96 to 131
94 – 95 Annual Report Overview
Strategic
Report
Operational
Review
Financial
Review Corporate Governance Financial
Statements
2023
of Cash Flows for the year
ended 31 December 2023
| ’000 RUB | Note | 2023 | 2022 |
|---|---|---|---|
| CASH FLOWS FROM OPERATING ACTIVITIES | |||
| Cash receipts from customers |
|
|
|
| Other cash receipts |
|
|
|
| Interest received |
|
|
|
| Cash paid to suppliers and employees |
( |
( |
|
| Taxes other than on income |
( |
( |
|
| Other cash payments |
( |
( |
|
| VAT paid |
( |
( |
|
| Income tax paid |
( |
( |
|
| Net cash from operating activities |
|
|
|
| CASH FLOWS FROM INVESTING ACTIVITIES | |||
| Purchase of property, plant and equipment (excluding VAT) |
( |
( |
|
| Purchase of intangible assets (excluding VAT) |
( |
( |
|
| Proceeds from sale of investment property (excluding VAT) |
|
|
|
| Proceeds from sale of property, plant and equipment (excluding VAT) |
|
|
|
| Net cash used in investing activities |
( |
( |
|
| CASH FLOWS FROM FINANCING ACTIVITIES | |||
| Proceeds from loans and borrowings | 27 |
|
|
| Repayment of loans and borrowings | 27 |
( |
( |
| Interest paid on loans and borrowings | 27 |
( |
( |
| Repayment of principal amount of lease liabilities | 27 |
( |
( |
| Interest paid on lease liabilities | 27 |
( |
( |
| Dividends paid | 22 |
|
( |
| Other financial payments and proceeds |
( |
( |
|
| Net cash used in financing activities | 27 |
( |
( |
| Net increase in cash and cash equivalents |
( |
|
|
| Cash and cash equivalents at the beginning of the year | 21 |
|
|
| Effect of exchange rate fluctuations on cash and cash equivalents |
( |
( |
|
| Cash and cash equivalents at the end of the year | 21 |
|
|
The consolidated statement of cash flows is to be read in conjunction with the notes to, and forming part of, the consoli-
dated financial statements set out on pages 96 to 131
Consolidated Statement
of Changes in Equity for the year
ended 31 December 2023
| ’000 RUB | Note | Sharecapital | Legalreserve | Additionalpaid-in capital | Retainedearnings | Translationreserve | Total equity |
|---|---|---|---|---|---|---|---|
| Balance at 1 January 2022 |
|
|
|
|
|
|
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| Dividends declared | 22 |
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| (Loss) for the year |
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The consolidated statement of changes in equity is to be read in conjunction with the notes to, and forming part of,
the consolidated financial statements set out on pages 96 to 131
94 – 95 Annual Report Overview
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2023
Notes to the Consolidated
Financial Statements for the year
ended 31 December 2023
96 – 97 Annual Report Overview
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2023
98 – 99 Annual Report Overview
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Statements
| ’000 RUB | Note | 2023 | 2022 |
|---|---|---|---|
| EBITDA | 17,025,725 | 17,020,401 | |
| Revaluation of investment property | 9, 13 | – | (135,000) |
| Net loss from disposal of non-current assets and net impairment of non-current assets | 9 | (349,457) | (215,749) |
| Loss from write-off of receivables and impairment of receivables | 9 | (229,027) | (197,916) |
| (Loss) from disposal of right-of-use assets | 9 | (80,067) | - |
| Depreciation and amortisation | 8 | (11,068,518) | (10,661,819) |
| Finance income | 10 | 252,676 | 438,380 |
| Finance costs | 10 | (7,519,479) | (6,080,150) |
| Foreign exchange (loss)/gain | 11 | (1,074,086) | 312,806 |
| Other one-off items | (445,928) | (58,968) | |
| (Loss)/Profit before income tax | (3,488,161) | 421,985 | |
| Income tax benefit/(expense) | 12 | 610,099 | (180,455) |
| (Loss)/Profit for the year | (2,878,062) | 241,530 |
| Subsidiary | Country | Nature of operations |
|---|---|---|
| LLC O’KEY | Russian Federation | Retail |
| LLC Fresh Market | Russian Federation | Retail and real estate |
| JSC Dorinda | Russian Federation | Real estate |
| LLC O’KEY management | Russian Federation | Managing company |
| LLC O’KEY Logistics | Russian Federation | Import operations |
| O’KEY Investments Ltd | Cyprus | Financing |
| ’000 RUB | Note | 2023 | 2022 |
|---|---|---|---|
| Personnel costs | 17,648,595 | 16,850,253 | |
| Depreciation and amortisation | 14–16 | 11,068,518 | 10,661,819 |
| Communication and utilities | 5,355,003 | 4,586,749 | |
| Advertising and marketing | 2,199,563 | 2,295,894 | |
| Repairs and maintenance costs | 1,779,811 | 1,582,106 | |
| Insurance and bank commissions | 1,347,555 | 1,259,641 | |
| Security expenses | 770,506 | 784,885 | |
| Operating taxes | 717,655 | 765,669 | |
| Legal and professional expenses | 673,604 | 651,024 | |
| Materials and supplies | 441,329 | 460,448 | |
| Variable lease expenses and expenses relating to short-term and low value leases | 439,631 | 448,245 | |
| Other costs | 74,116 | 43,202 | |
| Total general, selling and administrative expenses | 42,515,886 | 40,389,935 |
| ’000 RUB | 2023 | O’Key 2022 | Da! 2023 | 2022 | Total2023 | 2022 |
|---|---|---|---|---|---|---|
| EXTERNAL REVENUE | ||||||
| • Sales of trading stock | 136,150,699 | 141,192,389 | 63,825,020 | 53,296,838 | 199,975,719 | 194,489,227 |
| • Sales of self-produced catering products | 5,796,395 | 5,711,789 | - | - | 5,796,395 | 5,711,789 |
| Revenue from contracts with customers | 141,947,094 | 146,904,178 | 63,825,020 | 53,296,838 | 205,772,114 | 200,201,016 |
| Rental income | 2,032,979 | 1,919,460 | 59,543 | 50,250 | 2,092,522 | 1,969,710 |
| Total revenue | 143,980,073 | 148,823,638 | 63,884,563 | 53,347,088 | 207,864,636 | 202,170,726 |
| Inter-segment revenue | 323,420 | 415,786 | 1,627,792 | 1,697,088 | 1,951,212 | 2,112,874 |
| EBITDA | 12,642,821 | 13,377,419 | 4,382,904 | 3,642,982 | 17,025,725 | 17,020,401 |
100 – 101 Annual Report Overview
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2023
| ’000 RUB | 2023 | 2022 |
|---|---|---|
| Foreign exchange loss on financial items | (2,617,287) | (4,277,117) |
| Foreign exchange gain on financial items | 1,764,243 | 4,815,285 |
| Net foreign exchange (loss)/gain on financial items | (853,044) | 538,168 |
| Foreign exchange loss on operating items | (221,042) | (225,362) |
| Total foreign exchange (loss)/gain | (1,074,086) | 312,806 |
| ’000 RUB | 2023 | 2022 |
|---|---|---|
| Current tax expense | (75,164) | (512,422) |
| Deferred tax benefit | 685,263 | 331,967 |
| Total income tax benefit/(expense) | 610,099 | (180,455) |
| ’000 RUB | 2023 | 2022 |
|---|---|---|
| (Loss)/Profit before income tax | (3,488,161) | 421,985 |
| Theoretical income tax at applicable tax rate of 20% | 697,632 | (84,397) |
| Effect of income taxed at different rates | 22,323 | 76,856 |
| Tax effect of items which are not deductible for taxation purposes: | ||
| • Inventory shrinkage expenses | (7,274) | (47,481) |
| • Other non-deductible expenses | (61,730) | (70,257) |
| Adjustments to current income tax | (40,852) | (55,176) |
| Income tax (expense) for the year | 610,099 | (180,455) |
| ’000 RUB | 2023 | 2022 |
|---|---|---|
| Fees for statutory audit of annual and consolidated accounts | 31,941 | 21,768 |
| Fees charged for other assurance services (other advisors) | 4,300 | 9,011 |
| Fees charged for tax advisory services (other advisors) | 1,500 | 9,622 |
| Total auditors’ remuneration | 37,741 | 40,401 |
| ’000 RUB | Note | 2023 | 2022 |
|---|---|---|---|
| Gain from modification of leases | 368,686 | 6,720 | |
| Net loss from disposal of non-current assets | (349,457) | (110,658) | |
| Impairment of non-current assets | 14 | - | (105,000) |
| Impairment of receivables/ Reversal of impairment | (53,476) | 2,729 | |
| Loss from write-off of receivables | (175,551) | (200,645) | |
| Loss from revaluation of investment property | 13 | - | (135,000) |
| Loss from disposal of right-of-use assets | (80,067) | (91) | |
| Sundry income and expense, net | (1,769) | (124,958) | |
| Total other operating income and expenses, net | (291,634) | (666,903) |
| ’000 RUB | Note | 2023 | 2022 |
|---|---|---|---|
| RECOGNISED IN PROFIT OR LOSS | |||
| Interest income on bank deposits | 252,676 | 438,380 | |
| Total finance income | 252,676 | 438,380 | |
| Interest expense on loans and borrowings | (5,029,949) | (4,006,800) | |
| Interest expense on lease liabilities | 25 | (2,489,530) | (2,073,350) |
| Total finance costs | (7,519,479) | (6,080,150) | |
| Net finance costs recognised in profit or loss | (7,266,803) | (5,641,770) |
102 – 103 Annual Report Overview
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2023
| ’000 RUB | 1 January 2023 | Recognisedin profit or loss | 31 December 2023 |
|---|---|---|---|
| TAX EFFECT OF DEDUCTIBLE/ (TAXABLE) TEMPORARYDIFFERENCES AND TAX LOSS CARRY FORWARDS | |||
| Investment property | 179,953 | - | 179,953 |
| Property, plant and equipment | (1,303,769) | 43,210 | (1,260,559) |
| Construction in progress | (211,505) | (56,043) | (267,548) |
| Right-of-use assets | (2,610,919) | (1,009,284) | (3,620,203) |
| Intangible assets | (106,099) | 208,721 | 102,622 |
| Other non-current assets | (42,157) | 193,234 | 151,077 |
| Inventories | 258,045 | 10,067 | 268,112 |
| Trade and other receivables and payables | 440,124 | (221,300) | 218,824 |
| Long-term investments | 5,785 | - | 5,785 |
| Lease liabilities | 4,689,130 | 1,376,495 | 6,065,625 |
| Tax loss carry-forwards | 3,414,363 | 140,165 | 3,554,526 |
| Net deferred tax assets | 4,712,951 | 685,263 | 5,398,214 |
| Recognised deferred tax assets | 5,245,595 | - | 6,082,047 |
| Recognised deferred tax liabilities | (532,644) | - | (683,833) |
| ’000 RUB | 1 January 2022 | Recognisedin profit or loss | 31 December 2022 |
|---|---|---|---|
| TAX EFFECT OF DEDUCTIBLE/ (TAXABLE) TEMPORARY DIFFERENCES AND TAX LOSS CARRY FORWARDS | |||
| Investment property | 152,953 | 27,000 | 179,953 |
| Property, plant and equipment | (1,464,399) | 160,630 | (1,303,769) |
| Construction in progress | (73,423) | (138,082) | (211,505) |
| Right-of-use assets | (2,909,161) | 298,242 | (2,610,919) |
| Intangible assets | (96,079) | (10,020) | (106,099) |
| Other non-current assets | 145,591 | (187,748) | (42,157) |
| Inventories | 267,631 | (9,586) | 258,045 |
| Trade and other receivables and payables | 139,571 | 300,553 | 440,124 |
| Long-term investments | 5,785 | - | 5,785 |
| Lease liabilities | 4,812,607 | (123,477) | 4,689,130 |
| Tax loss carry-forwards | 3,399,908 | 14,455 | 3,414,363 |
| Net deferred tax assets | 4,380,984 | 331,967 | 4,712,951 |
| Recognised deferred tax assets | 4,895,412 | - | 5,245,595 |
| Recognised deferred tax liabilities | (514,428) | - | (532,644) |
104 – 105 Annual Report Overview
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2023
| ’000 RUB | Land | Buildings | Leaseholdimprovements | Machineryandequipment,auxiliaryfacilitiesand otherfixed assets | Totalproperty,plant andequipment | Constructionin progress | Totalproperty,plant andequipmentandconstructionin progress |
|---|---|---|---|---|---|---|---|
| COST | |||||||
| Balance at 1 January 2022 | 3,735,039 | 42,294,973 | 10,586,717 | 18,273,095 | 74,889,824 | 2,974,861 | 77,864,685 |
| Additions | - | 5,768 | 10,346 | 2,761,363 | 2,777,477 | 3,041,853 | 5,819,330 |
| Transfers | - | 433,262 | 2,355,033 | 557,341 | 3,345,636 | (3,345,636) | - |
| Disposals | - | (546) | (115,203) | (929,780) | (1,045,529) | (37,290) | (1,082,819) |
| Balance at 31 December 2022 | 3,735,039 | 42,733,457 | 12,836,893 | 20,662,019 | 79,967,408 | 2,633,788 | 82,601,196 |
| Balance at 1 January 2023 | 3,735,039 | 42,733,457 | 12,836,893 | 20,662,019 | 79,967,408 | 2,633,788 | 82,601,196 |
| Additions | 21,000 | 53,742 | 4,160 | 2,251,065 | 2,329,967 | 3,814,811 | 6,144,778 |
| Transfers | - | 803,977 | 2,106,289 | 497,363 | 3,407,629 | (3,407,629) | - |
| Disposals | - | (19,255) | (320,272) | (1,108,648) | (1,448,175) | (610,835) | (2,059,010) |
| Balance at 31 December 2023 | 3,756,039 | 43,571,921 | 14,627,070 | 22,301,799 | 84,256,829 | 2,430,135 | 86,686,964 |
| DEPRECIATION AND IMPAIRMENT LOSSES | |||||||
| Balance at 1 January 2022 | - | (13,237,435) | (5,903,739) | (14,131,511) | (33,272,685) | (1,202,772) | (34,475,457) |
| Depreciation for the year | - | (1,397,560) | (1,924,340) | (1,748,345) | (5,070,245) | - | (5,070,245) |
| Impairment losses | - | - | - | - | - | (105,000) | (105,000) |
| Disposals | - | 257 | 103,919 | 881,197 | 985,373 | - | 985,373 |
| Balance at 31 December 2022 | - | (14,634,738) | (7,724,160) | (14,998,659) | (37,357,557) | (1,307,772) | (38,665,329) |
| Balance at 1 January 2023 | - | (14,634,738) | (7,724,160) | (14,998,659) | (37 357 557) | (1,307,772) | (38,665,329) |
| Depreciation for the year | - | (697,560) | (2,237,291) | (1,994,998) | (4,929,849) | - | (4,929,849) |
| Disposals | - | 6,243 | 248,814 | 1,016,002 | 1,271,059 | - | 1,271,059 |
| Balance at 31 December 2023 | - | (15,326,055) | (9,712,637) | (15,977,655) | (41,016,347) | (1,307,772) | (42,324,119) |
| NET BOOK VALUE | |||||||
| At 1 January 2022 | 3,735,039 | 29,057,538 | 4,682,978 | 4,141,584 | 41,617,139 | 1,772,089 | 43,389,228 |
| At 31 December 2022 | 3,735,039 | 28,098,719 | 5,112,733 | 5,663,360 | 42,609,851 | 1,326,016 | 43,935,867 |
| At 31 December 2023 | 3,756,039 | 28,245,866 | 4,914,433 | 6,324,144 | 43,240,482 | 1,122,363 | 44,362,845 |
| ’000 RUB | Note | |
|---|---|---|
| Investment properties at fair value as at 1 January 2022 | 1,947,218 | |
| Loss from revaluation of investment property | 9 | (135,000) |
| Reclassification to non-current assets held for sale | (305,000) | |
| Other changes | (32,885) | |
| Investment properties at fair value as at 31 December 2022 | 1,474,333 | |
| Investment properties at fair value as at 1 January 2023 | 1,474,333 | |
| Disposals | (217,115) | |
| Investment properties at fair value as at 31 December 2023 | 1,257,218 |
106 – 107 Annual Report Overview
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2023
| ’000 RUB | Software | Other intangibleassets | Total |
|---|---|---|---|
| COST | |||
| Balance at 1 January 2022 | 1,964,058 | 316,432 | 2,280,490 |
| Additions | 836,228 | 103,282 | 939,510 |
| Disposals | (826,268) | (110,254) | (936,522) |
| Balance at 31 December 2022 | 1,974,018 | 309,460 | 2,283,478 |
| Balance at 1 January 2023 | 1,974,018 | 309,460 | 2,283,478 |
| Additions | 456,824 | 272,123 | 728,947 |
| Disposals | (571,463) | (149,409) | (720,872) |
| Balance at 31 December 2023 | 1,859,379 | 432,174 | 2,291,553 |
| AMORTISATION AND IMPAIRMENT LOSSES | |||
| Balance at 1 January 2022 | (813,330) | (136,784) | (950,114) |
| Amortisation for the year | (584,211) | (37,029) | (621,240) |
| Disposals | 481,320 | 12,071 | 493,391 |
| Balance at 31 December 2022 | (916,221) | (161,742) | (1,077,963) |
| Balance at 1 January 2023 | (916,221) | (161,742) | (1,077,963) |
| Amortisation for the year | (491,512) | (47,730) | (539,242) |
| Disposals | 520,939 | 19,266 | 540,205 |
| Balance at 31 December 2023 | (886,794) | (190,206) | (1,077,000) |
| CARRYING AMOUNTS | |||
| At 1 January 2022 | 1,150,728 | 179,648 | 1,330,376 |
| At 31 December 2022 | 1,057,797 | 147,718 | 1,205,515 |
| At 31 December 2023 | 972,585 | 241,968 | 1,214,553 |
| ’000 RUB | Trade premises | Land | Other | Total |
|---|---|---|---|---|
| Balance at 1 January 2022 | 14,915,114 | 3,717,642 | 1,558,143 | 20,190,899 |
| Additions | 2,199,768 | - | 133,059 | 2,332,827 |
| Modifications and reassessments | 1,906,936 | (176,191) | (60,020) | 1,670,725 |
| Depreciation | (4,092,331) | (168,111) | (717,193) | (4,977,635) |
| Balance at 31 December 2022 | 14,929,487 | 3,373,340 | 913,989 | 19,216,816 |
| Balance at 1 January 2023 | 14,929,487 | 3,373,340 | 913,989 | 19,216,816 |
| Additions | 1,845,165 | 251,805 | 7,977 | 2,104,947 |
| Modifications and reassessments | 4,011,602 | 28,939 | 3,643,558 | 7,684,099 |
| Depreciation | (4,616,017) | (168,449) | (830,310) | (5,614,776) |
| Disposals | - | (81,323) | - | (81,323) |
| Balance at 31 December 2023 | 16,170,237 | 3,404,312 | 3,735,214 | 23,309,763 |
108 – 109 Annual Report Overview
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2023
The Group’s exposure to credit and currency risks and credit loss allowance as at 31 December 2023 and 31 December 202
2 related to trade and other receivables are disclosed in Note 28.
21. Cash and cash equivalents
Term deposits had original maturities of less than three months.
The Group’s exposure to currency risk related to cash and cash equivalents is disclosed in Note 28.
22. Equity
As at 31 December 2023 and 31 December 2022,
the Company’s authorised, issued and fully paid share
capital of RUB 119,440 thousand, the RUB equiv-
alent of EUR 2,691 thousand, is represented
by 269,074,000 ordinary shares with a par value
of 0.01 EUR each. Each share is entitled to one vote,
except as may be otherwise provided by the Articles
of incorporation or by applicable law.
In accordance with Luxembourg Company Law,
the Company is required to transfer a minimum of 5%
of its net profits for each financial year to a legal reserve.
This requirement ceases to be necessary once the bal-
ance of the legal reserve reaches 10% of the issued share
capital. The legal reserve is not available for distribution
to the shareholders. As at 31 December 2023 and 2022,
the legal reserve was formed in full.
Additional paid-in capital represents the excess of con-
tributions received over par value of shares issued. There
were no movements in additional paid-in capital during
the years ended 31 December 2023 and 31 December 20
22.
In July 2022, the Company approved an interim dividend
on all shares in issue of EUR 8,500 thousand ( 0.03159
Euro per share), the equivalent of RUB 480,594 thousand
at the official exchange rate as of the date of the approval.
The corresponding payments were made to the share-
holders in August 2022 in full. Dividends declared were
recognised as distribution to owners in the consolidated
statement of changes in equity.
No dividends were declared and paid in 2023.
23. (Loss)/Earnings per share
Basic earnings per share are calculated by dividing
the profit or loss attributable to owners of the Company
by the weighted average number of ordinary shares
in issue during the year. The Company has no dilutive
potential ordinary shares; therefore, the diluted earnings
per share equals the basic earnings per share.
Earnings per share is calculated as follows:
17. Prepayments
18. Other non-current assets
19. Inventories
The Group tested the inventories for obsolescence and wrote down the inventories to their net realisable value,
which resulted in a decrease of the carrying value of inventories by RUB 732,654 thousand as at 31 December 2023
(31 December 2022: RUB 666,098 thousand). The write down to net realisable value was determined by applying percent-
ages of discount on sales and write-offs of slow-moving goods to the appropriate aging of the goods. The percentages
of discount were based on the management’s best estimate following the experience of the discount sales.
20. Trade and other receivables
110 – 111 Annual Report Overview
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2 related to trade and other receivables are disclosed in Note 28.
| ’000 RUB | 31 December 2023 | 31 December 2022 |
|---|---|---|
| Cash on hand | 162,782 | 302,561 |
| Bank current accounts | 4,866,560 | 3,010,675 |
| Term deposits | 5,988,729 | 8,043,004 |
| Cash in transit | 507,720 | 423,094 |
| Total cash and cash equivalents | 11,525,791 | 11,779,334 |
| ‘000 RUB | 2023 | 2022 |
|---|---|---|
| (Loss)/Profit for the year | (2,878,062) | 241,530 |
| Weighted average number of ordinary shares in issue (thousands) | 269,074 | 269,074 |
| Basic and diluted (loss)/earnings per ordinary share (in RUB per share) | (10.7) | 0.9 |
| ’000 RUB | 31 December 2023 | 31 December 2022 |
|---|---|---|
| Prepayments for goods | 320,267 | 514,967 |
| Prepayments for variable lease payments – third parties | 126,277 | 118,645 |
| Prepayments for services | 192,597 | 299,642 |
| VAT on prepayments | 86,172 | 44,462 |
| Other prepayments | 74,999 | 199,745 |
| Total prepayments | 800,312 | 1,177,461 |
| ’000 RUB | 31 December 2023 | 31 December 2022 |
|---|---|---|
| FINANCIAL ASSETS WITHIN OTHER NON-CURRENT ASSETS | ||
| Long-term refundable deposits to lessors | 564,621 | 570,419 |
| Total financial assets within other non-current assets | 564,621 | 570,419 |
| OTHER NON-CURRENT ASSETS | ||
| Prepayments for non-current assets | 307,483 | 1,230,720 |
| Total other non-current assets | 872,104 | 1,801,139 |
| ’000 RUB | 31 December 2023 | 31 December 2022 |
|---|---|---|
| Goods for resale | 24,145,751 | 22,846,326 |
| Raw materials and consumables | 1,562,829 | 1,736,759 |
| Write-down to net realisable value | (732,654) | (666,098) |
| Total inventories | 24,975,926 | 23,916,987 |
| ’000 RUB | 31 December 2023 | 31 December 2022 |
|---|---|---|
| FINANCIAL ASSETS WITHIN TRADE AND OTHER RECEIVABLES | ||
| Trade receivables | 420,326 | 332,773 |
| Bonuses receivable from suppliers | 1,553,709 | 2,031,406 |
| Other financial receivables | 169,427 | 210,178 |
| Total financial assets within trade and other receivables | 2,143,462 | 2,574,357 |
| OTHER RECEIVABLES | ||
| VAT receivable | 138,294 | 338,689 |
| Prepaid taxes other than income tax | 234,436 | 17,174 |
| Total trade and other receivables | 2,516,192 | 2,930,220 |
110 – 111 Annual Report Overview
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2023
| ’000 RUB | 2023 | 2022 |
| Balance at 1 January | 22,544,804 | 24,063,037 |
| Additions | 2,000,248 | 2,170,785 |
| Modifications and reassessments | 7,090,769 | 1,631,120 |
| Repayment | (7,759,668) | (7,170,232) |
| Interest expense | 2,491,371 | 2,075,250 |
| Foreign exchange (loss)/gain | 356,113 | (225,247) |
| Disposals | (1,256) | 91 |
| Balance at 31 December | 26,722,381 | 22,544,804 |
| Non-current lease liabilities | 20,760,179 | 16,924,142 |
| Current lease liabilities | 5,962,202 | 5,620,662 |
| ’000 RUB | 31 December 2023 | 31 December 2022 |
| FINANCIAL LIABILITIES AT AMORTISED COST | ||
| Trade payables | 27,883,950 | 26,771,109 |
| Other financial payables | 198,290 | 184,761 |
| Total financial liabilities at amortised cost | 28,082,240 | 26,955,870 |
| Payables to staff | 1,472,151 | 1,397,271 |
| Taxes payable other than income tax | 1,028,784 | 1,683,457 |
| Advances received from lessees | 391,144 | 520,096 |
| Contract liability related to gift cards | 87,764 | 80,251 |
| Total trade and other payables | 31,062,083 | 30,636,945 |
| 31 December 2023 | 31 December 2022 | ||||
| ’000 RUB | Currency | Maturity | Carrying value | Maturity | Carrying value |
| NON-CURRENT LOANS AND BORROWINGS | |||||
| Secured bank loans | RUB | 2025–2027 | 11,794,118 | 2024–2027 | 10,652,941 |
| Unsecured bank facilities | RUB | 2025–2028 | 12,850,000 | 2024–2026 | 13,500,000 |
| Unsecured bonds | RUB | 2026–2030 | 16,484,330 | 2024–2026 | 11,372,271 |
| Total non-current loans and borrowings | 41,128,448 | 35,525,212 | |||
| CURRENT LOANS AND BORROWINGS | |||||
| Secured bank loans | RUB | - | 2023 | 729,412 | |
| Unsecured bank facilities | RUB | 2024 | 3,500,000 | 2023 | 3,033,333 |
| Unsecured bonds | RUB | 2024 | 2,500,000 | 2023 | 6,195,201 |
| Unsecured loans from third parties | RUB | 2024 | 2,850 | 2023 | 2,850 |
| Total current loans and borrowings | 6,002,850 | 9,960,796 | |||
| Unsecured bonds interest | RUB | 240,529 | 209,488 | ||
| Secured bank loans | RUB | 3,305 | 2,034 | ||
| Unsecured loans interest | RUB | 10,615 | 4,215 | ||
| Interest accrued on loans and borrowings | 254,450 | 215,737 | |||
| Total current loans and borrowings,including interest accrued | 6,257,300 | 10,176,533 | |||
| Total loans and borrowings | 47,385,748 | 45,701,745 | |||
112 – 113 Annual Report Overview
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| ’000 RUB | Note | Loansand borrowings | Lease liabilities | Dividendspayable | Total |
|---|---|---|---|---|---|
| Total cash flows from financing activities | 3,766,169 | (7,170,232) | (480,594) | (3,884,657) | |
| NON-CASH CHANGES | |||||
| Additions to lease liabilities | 25 | - | 2,170,785 | - | 2,170,785 |
| Modifications and reassessments of lease liabilities | 25 | - | 1,631,120 | - | 1,631,120 |
| Accrued interest | 10,25 | 4,067,851 | 2,075,250 | - | 6,143,101 |
| Disposals | 25 | - | 91 | - | 91 |
| Difference between the par value of the placed bond and the actual cost of the bond redemption (income) | (19,572) | - | - | (19,572) | |
| Dividends declared | 22 | - | - | 480,594 | 480,594 |
| Effect of changes in foreign exchange rates | (78,761) | (225,247) | - | (304,008) | |
| Total non-cash changes | 3,969,518 | 5,651,999 | 480,594 | 10,102,111 | |
| Balance at 31 December 2022 | 45,701,745 | 22,544,804 | - | 68,246,549 |
| ’000 RUB | Note | Loans and borrowings | Lease liabilities | Dividends payable | Total |
| Balance at 1 January 2023 | 45,701,745 | 22,544,804 | - | 68,246,549 | |
| CASH FLOWS FROM FINANCING ACTIVITIES | |||||
| Proceeds from loans and borrowings | 15,500,003 | - | - | 15,500,003 | |
| Repayment of loans and borrowings | (13,834,268) | - | - | (13,834,268) | |
| Interest paid on loans and borrowings | (4,939,018) | - | - | (4,939,018) | |
| Repayment of principal amount of lease liabilities | - | (5,268,297) | - | (5,268,297) | |
| Interest paid on lease liabilities | - | (2,491,371) | - | (2,491,371) | |
| Other financial payments | (125,188) | - | - | (125,188) | |
| Total cash flows from financing activities | (3,398,471) | (7,759,668) | (11,158,139) | ||
| NON-CASH CHANGES | |||||
| Additions to lease liabilities | 25 | - | 2,000,248 | - | 2,000,248 |
| Modifications and reassessments of lease liabilities | 25 | - | 7,090,769 | - | 7,090,769 |
| Accrued interest | 10,25 | 5,029,949 | 2,491,371 | - | 7,521,321 |
| Disposals | 25 | - | (1,256) | - | (1,256) |
| Difference between the par value of the placed bond and the actual cost of the bond redemption (income) | (40,348) | - | - | (40,348) | |
| Effect of changes in foreign exchange rates | 92,873 | 356,113 | - | 448,986 | |
| Total non-cash changes | 5,082,474 | 11,937,245 | - | 17,019,953 | |
| Balance at 31 December 2023 | 47,385,748 | 26,722,381 | - | 74,108,129 | |
| Balance at 1 January 2022 | 37,966,058 | 24,063,037 | - | 62,029,095 | |
| CASH FLOWS FROM FINANCING | |||||
| ACTIVITIES | |||||
| Proceeds from loans and borrowings | 17,772,121 | - | - | 17,772,121 | |
| Repayment of loans and borrowings | (9,958,485) | - | - | (9,958,485) | |
| Interest paid on loans and borrowings | (3,966,907) | - | - | (3,966,907) | |
| Repayment of principal amount of lease liabilities | - | (5,094,982) | - | (5,094,982) | |
| Interest paid on lease liabilities | - | (2,075,250) | - | (2,075,250) | |
| Dividends paid | - | - | (480,594) | (480,594) | |
| Other financial payments | (80,560) | - | - | (80,560) |
114 – 115 Annual Report Overview
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| ’000 RUB | Gross amount | ECL | Carrying amount |
|---|---|---|---|
| Trade receivables | 444,579 | (24,253) | 420,326 |
| Bonuses receivable from suppliers | 1,560,372 | (6,663) | 1,553,709 |
| Other financial receivables | 207,718 | (38,291) | 169,427 |
| Total | 2,212,669 | (69,207) | 2,143,462 |
| ’000 RUB | Gross amount | ECL | Carrying amount |
|---|---|---|---|
| Trade receivables | 339,854 | (7,081) | 332,773 |
| Bonuses receivable from suppliers | 2,045,886 | (14,480) | 2,031,406 |
| Other financial receivables | 223,556 | (13,378) | 210,178 |
| Total | 2,609,296 | (34,939) | 2,574,357 |
| ’000 RUB | Note | Carrying amount31 December 2023 | 31 December 2022 |
|---|---|---|---|
| Long-term refundable deposits to lessors | 18 | 564,621 | 570,419 |
| Trade and other receivables | 20 | 2,143,462 | 2,574,357 |
| Cash and cash equivalents | 21 | 11,363,009 | 11,476,773 |
| Total | 14,071,092 | 14,621,549 |
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| ’000 RUB | 31 December 2023 | 31 December 2022 |
|---|---|---|
| Trade and other receivables | 7,283 | 689 |
| Cash and cash equivalents | 361,035 | 28,507 |
| Trade and other payables | (163,988) | (272,332) |
| Total | 204,330 | (243,136) |
| ’000 RUB | 31 December 2023 | 31 December 2022 |
|---|---|---|
| Cash and cash equivalents | 49,089 | 2 |
| Lease liabilities | (1,509,597) | (1,459,682) |
| Trade and other payables | (49,088) | (102,224) |
| Total | (1,509,596) | (1,561,904) |
| ’000 RUB | 31 December 2023 | 31 December 2022 |
|---|---|---|
| Trade and other receivables | 7,815 | 1,065 |
| Cash and cash equivalents | 693 | 443 |
| Trade and other payables | (119,268) | (6,670) |
| Total | (110,760) | (5,162) |
| 31 December 2023’000 RUB | Carryingamount | Contractualcash flows | Demandand less than6 months | From 6to 12 months | From 1to 5 years | More than5 years |
|---|---|---|---|---|---|---|
| FINANCIAL LIABILITIES AT AMORTISED COST | ||||||
| Secured bank loans | 11,797,423 | 15,555,668 | 696,379 | 700,690 | 14,158,599 | - |
| Unsecured bonds | 19,224,859 | 23,922,236 | 2,516,287 | 2,237,253 | 19,028,082 | 140,614 |
| Unsecured bank facilities | 16,360,615 | 20,665,411 | 4,501,323 | 890,651 | 15,273,437 | - |
| Unsecured loans from third parties | 2,850 | 2,896 | 46 | 2,850 | - | - |
| Lease liabilities | 26,722,381 | 37,560,913 | 4,045,518 | 4,005,828 | 19,968,013 | 9,541,554 |
| Trade and other payables | 28,082,240 | 28,082,240 | 28,082,240 | - | - | - |
| Total future pay- ments, including future princi- pal and interest payments | 102,190,368 | 125,789,364 | 39,841,793 | 7,837,272 | 68,428,131 | 9,682,168 |
| 31 December 2022’000 RUB | Carryingamount | Contractualcash flows | Demandand less than6 months | From 6to 12 months | From 1to 5 years | More than5 years |
|---|---|---|---|---|---|---|
| FINANCIAL LIABILITIES AT AMORTISED COST | ||||||
| Secured bank loans | 11,384,387 | 14,479,556 | 533,576 | 1,257,448 | 12,688,532 | - |
| Unsecured bonds | 17,776,960 | 21,540,117 | 2,008,245 | 5,700,389 | 13,831,483 | - |
| Unsecured bank facilities | 16,537,548 | 20,482,625 | 764,537 | 3,780,026 | 15,938,062 | - |
| Unsecured loans from third parties | 2,850 | 2,894 | 44 | 2,850 | - | - |
| Lease liabilities | 22,544,804 | 33,037,739 | 3,747,596 | 3,559,353 | 14,094,751 | 11,636,039 |
| Trade and other payables | 26,955,870 | 26,955,870 | 26,955,870 | - | - | - |
| Total future pay- ments, includ- ing future principal and inter- est payments | 95,202,419 | 116,498,801 | 34,009,868 | 14,300,066 | 56,552,828 | 11,636,039 |
118 – 119 Annual Report Overview
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| ’000 RUB | Trade and otherreceivables | Trade and other payables |
|---|---|---|
| 31 DECEMBER 2022 | ||
| Gross amounts before offsetting | 4,528,600 | 28,910,113 |
| Amounts offset | (1,954,243) | (1,954,243) |
| Net amounts presented in the consolidated statement of financial position | 2,574,357 | 26,955,870 |
| Amounts related to recognised financial instruments that do not meet some or all of the offsetting criteria | (1,148,843) | (1,148,843) |
| Net amount | 1,425,514 | 25,807,027 |
| 31 DECEMBER 2023 | ||
| Gross amounts before offsetting | 3,376,647 | 29,315,426 |
| Amounts offset | (1,233,185) | (1,233,185) |
| Net amounts presented in the consolidated statement of financial position | 2,143,462 | 28,082,241 |
| Amounts related to recognised financial instruments that do not meet some or all of the offsetting criteria | (1,160,394) | (1,160,394) |
| Net amount | 983,068 | 26,921,847 |
| ’000 RUB | 31 December 2023 | 31 December 2022 |
|---|---|---|
| FIXED RATE INSTRUMENTS | ||
| Cash and cash equivalents | 10,855,289 | 11,053,679 |
| Loans and borrowings | (37,328,691) | (38,849,812) |
| Lease liabilities | (26,722,381) | (22,544,804) |
| Total | (53,195,783) | (50,340,937) |
| VARIABLE RATE INSTRUMENTS | ||
| Loans and borrowings | (10,057,057) | (6,851,933) |
| Total | (10,057,057) | (6,851,933) |
| ’000 RUB | Profit or loss 500 bp increase | 500 bp decrease | Equity500 bp increase | 500 bp decrease |
|---|---|---|---|---|
| 31 DECEMBER 2023 | ||||
| Variable rate instruments | 502,853 | (502,853) | - | - |
| Cash flow sensitivity (net) | 502,853 | (502,853) | - | - |
120 – 121 Annual Report Overview
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| ’000 RUB | 2023 | 2022 |
|---|---|---|
| SHORT-TERM EMPLOYEE BENEFITS: | ||
| Salaries and short-term bonuses | 461,371 | 395,924 |
| Social security contributions | 23,170 | 24,781 |
| Other short-term payments | - | 58,968 |
| Total | 484,541 | 479,673 |
| ’000 RUB | Income 2023 | 2022 | Receivables31 December 2023 | 31 December 2022 |
|---|---|---|---|---|
| Sale of services | 2,204 | 1,760 | - | 473 |
| Total | 2,204 | 1,760 | - | 473 |
| ’000 RUB | Expenses2023 | 2022 |
|---|---|---|
| Variable lease expenses and expenses relating to short-term and low value leases | 84,622 | 33,265 |
| Interest expense on lease liabilities | 119,629 | 127,593 |
| Interest expense on loans and borrowings | - | 56,100 |
| Other services received | - | 11,375 |
| Total | 204,251 | 228,333 |
| ’000 RUB | 31 December 2023 | 31 December 2022 |
|---|---|---|
| Lease liabilities due to other related parties, including: | 1,380,514 | 1,651,238 |
| Current lease liabilities | 536,736 | 444,160 |
| Non-current lease liabilities | 843,778 | 1,207,078 |
122 – 123 Annual Report Overview
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130 – 131 Annual Report Overview
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Pick by Line (PBL)
– an effective method of picking orders
used in logistics and warehouse management based
on the organisation of stocks by ordered product lines,
often in accordance with the sequence of their completion
or along the delivery route
Planogram – a diagram that shows how and where specific
retail products should be placed on retail shelves or dis-
plays in order to increase customer purchases
Point of Sale (POS) platform – a system which
allows the processing and recording of transactions
between a company and their consumers, at the time
in which goods and/or services are purchased
Private Label (PL) – a brand owned not by a manufac-
turer or producer but by a retailer or supplier, who has
its goods made by a contract manufacturer under its own
label
Real Disposable Income – the post-tax and benefit
income available to households after an adjustment has
been made for price changes
Retail Predictive Application Server (RPAS) – con-
figurable software platform for developing forecasting
and planning applications
Selling Space – the area inside stores used to sell prod-
ucts, excluding areas rented out to third parties, own-pro-
duction areas, storage areas and the space between store
entry and the cash desk line
Stock Keeping Unit (SKU) – a number assigned to a par-
ticular product to identify the price, product options
and manufacturer of the merchandise
Stakeholder – any individual, group, or party
with an interest in an organisation and the outcomes
of its actions
Supply Chain Management (SCP) – the process of antic-
ipating the demand for products and planning their mate-
rials and components, production, marketing, distribution
and sale
Traffic – the number of tickets issued for the period
under review
Transport Management System (TMS) – software
for planning and executing the physical movement
of goods in the supply chain
Quality Management System (QMS) – a formalised sys-
tem that documents processes, procedures, and responsi-
bilities for achieving quality policies and objectives
Warehouse Management Systems (WMS) – a set
of policies and processes intended to organise the work
of a warehouse or distribution centre and ensure
that such a facility can operate efficiently and meet
its objectives
Yard Management System (YMS) – a software solution
designed to monitor the movement of trailers in the yard
and dock of a facility, distribution centre, or warehouse
Glossary
3PL (Third Party Logistics) – is a type of logistics
in which a retailer uses outsourcing services (3PL opera-
tors) in managing its supply chain
Average Ticket – the figure calculated by dividing total
sales, net of VAT, at all stores during the relevant year
by the number of tickets in that year
Alternative Transients Program (ATP) – a universal
program system for simulation of transient phenomena
of electromagnetic as well as electromechanical nature,
which is used within the DA! discounters network
Business Intelligence (BI) – comprises the strategies
and technologies used by enterprises for the data analysis
of business information. BI technologies provide historical,
current, and predictive views of business operations
Content Management System (CMS) – computer soft-
ware used to manage the creation and modification of dig-
ital content
Corporate Social Responsibility – Responsible attitude
in managing our impact on a range of stakeholders: cus-
tomers, colleagues, investors, suppliers, the community,
and the environment
Customer Relations Management (CRM) – a process
in which a business or other organisation administers
its interactions with customers, typically using data analy-
sis to study large amounts of information
Customer Value Proposition (CVP) – a business or mar-
keting statement that describes why a customer should
buy a product or use a service
Endpoint Detection and Response (EDR) – a cyber-
security technology that continually monitors an “end-
point” (e.g., mobile, phone, laptop, and Internet-of-things
devices) to mitigate malicious cyber threats, which is used
within the DA! discounter chain
Every Day Low Price (EDLP) – a pricing strategy prom-
ising consumers a low price without the need to wait
for sale price events or comparison shopping
Enterprise Resource Planning (ERP) – a modular soft-
ware system designed to integrate the main functional
areas of an organisation’s business processes into a uni-
fied system
Extended Warehouse Management (SAP EWM) –
an IT system, which is used to efficiently manage inven-
tory in the warehouse and for supporting processing
of the movement of goods, which is used in the Company’s’
distribution centres
Global Depositary Receipt (GDR) – a bank certificate
issued in more than one country for shares in a foreign
company
Global Food Safety Initiative (GFSI) – a private organi-
sation established and managed by the international trade
association the Consumer Goods Forum under Belgian law
in May 2000, the GFSI maintains a scheme to benchmark
food safety standards for manufacturers as well as farm
assurance standards
Hazard Analysis and Critical Control Points (HACCP) –
a systematic preventive approach to food safety
from biological, chemical, and physical hazards in pro-
duction processes that can cause the finished product
to be unsafe, and designs measurements to reduce these
risks to a safe level
High-Performance Analytical Appliance In-Memory
Database (HANA) – an in-memory data platform that
is deployable as an on-premise appliance, or in the cloud,
which is used in the Company’s’ distribution centres
Human Resource Management (HRM) – the strate-
gic approach to nurturing and supporting employees
and ensuring a positive workplace environment
Like-for-Like Sales (LFL) – the method of comparing cur-
rent year sales figures to prior year sales figures excluding
the expansion effect
Network Traffic Analysis (NTA) – a method of monitor-
ing network availability and activity to identify anomalies,
including security and operational issues, which is used
within the DA! discounter chain
Net Revenue – the amount of a company’s gross revenue
plus all negative revenue items
132 – 133 Annual Report Overview
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Operational
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Financial
Statements 2023
used in logistics and warehouse management based
on the organisation of stocks by ordered product lines,
often in accordance with the sequence of their completion
or along the delivery route
Planogram – a diagram that shows how and where specific
retail products should be placed on retail shelves or dis-
plays in order to increase customer purchases
Point of Sale (POS) platform – a system which
allows the processing and recording of transactions
between a company and their consumers, at the time
in which goods and/or services are purchased
Private Label (PL) – a brand owned not by a manufac-
turer or producer but by a retailer or supplier, who has
its goods made by a contract manufacturer under its own
label
Real Disposable Income – the post-tax and benefit
income available to households after an adjustment has
been made for price changes
Retail Predictive Application Server (RPAS) – con-
figurable software platform for developing forecasting
and planning applications
Selling Space – the area inside stores used to sell prod-
ucts, excluding areas rented out to third parties, own-pro-
duction areas, storage areas and the space between store
entry and the cash desk line
Stock Keeping Unit (SKU) – a number assigned to a par-
ticular product to identify the price, product options
and manufacturer of the merchandise
Stakeholder – any individual, group, or party
with an interest in an organisation and the outcomes
of its actions
Supply Chain Management (SCP) – the process of antic-
ipating the demand for products and planning their mate-
rials and components, production, marketing, distribution
and sale
Traffic – the number of tickets issued for the period
under review
Transport Management System (TMS) – software
for planning and executing the physical movement
of goods in the supply chain
Quality Management System (QMS) – a formalised sys-
tem that documents processes, procedures, and responsi-
bilities for achieving quality policies and objectives
Warehouse Management Systems (WMS) – a set
of policies and processes intended to organise the work
of a warehouse or distribution centre and ensure
that such a facility can operate efficiently and meet
its objectives
Yard Management System (YMS) – a software solution
designed to monitor the movement of trailers in the yard
and dock of a facility, distribution centre, or warehouse
Glossary
3PL (Third Party Logistics) – is a type of logistics
in which a retailer uses outsourcing services (3PL opera-
tors) in managing its supply chain
Average Ticket – the figure calculated by dividing total
sales, net of VAT, at all stores during the relevant year
by the number of tickets in that year
Alternative Transients Program (ATP) – a universal
program system for simulation of transient phenomena
of electromagnetic as well as electromechanical nature,
which is used within the DA! discounters network
Business Intelligence (BI) – comprises the strategies
and technologies used by enterprises for the data analysis
of business information. BI technologies provide historical,
current, and predictive views of business operations
Content Management System (CMS) – computer soft-
ware used to manage the creation and modification of dig-
ital content
Corporate Social Responsibility – Responsible attitude
in managing our impact on a range of stakeholders: cus-
tomers, colleagues, investors, suppliers, the community,
and the environment
Customer Relations Management (CRM) – a process
in which a business or other organisation administers
its interactions with customers, typically using data analy-
sis to study large amounts of information
Customer Value Proposition (CVP) – a business or mar-
keting statement that describes why a customer should
buy a product or use a service
Endpoint Detection and Response (EDR) – a cyber-
security technology that continually monitors an “end-
point” (e.g., mobile, phone, laptop, and Internet-of-things
devices) to mitigate malicious cyber threats, which is used
within the DA! discounter chain
Every Day Low Price (EDLP) – a pricing strategy prom-
ising consumers a low price without the need to wait
for sale price events or comparison shopping
Enterprise Resource Planning (ERP) – a modular soft-
ware system designed to integrate the main functional
areas of an organisation’s business processes into a uni-
fied system
Extended Warehouse Management (SAP EWM) –
an IT system, which is used to efficiently manage inven-
tory in the warehouse and for supporting processing
of the movement of goods, which is used in the Company’s’
distribution centres
Global Depositary Receipt (GDR) – a bank certificate
issued in more than one country for shares in a foreign
company
Global Food Safety Initiative (GFSI) – a private organi-
sation established and managed by the international trade
association the Consumer Goods Forum under Belgian law
in May 2000, the GFSI maintains a scheme to benchmark
food safety standards for manufacturers as well as farm
assurance standards
Hazard Analysis and Critical Control Points (HACCP) –
a systematic preventive approach to food safety
from biological, chemical, and physical hazards in pro-
duction processes that can cause the finished product
to be unsafe, and designs measurements to reduce these
risks to a safe level
High-Performance Analytical Appliance In-Memory
Database (HANA) – an in-memory data platform that
is deployable as an on-premise appliance, or in the cloud,
which is used in the Company’s’ distribution centres
Human Resource Management (HRM) – the strate-
gic approach to nurturing and supporting employees
and ensuring a positive workplace environment
Like-for-Like Sales (LFL) – the method of comparing cur-
rent year sales figures to prior year sales figures excluding
the expansion effect
Network Traffic Analysis (NTA) – a method of monitor-
ing network availability and activity to identify anomalies,
including security and operational issues, which is used
within the DA! discounter chain
Net Revenue – the amount of a company’s gross revenue
plus all negative revenue items
132 – 133 Annual Report Overview
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KPI
– Key Performance Indicators
LED – Light Emitting Diodes
LFL – Like-for-Like Sales
LLC – Limited Liability Company
LSE – London Stock Exchange
m 2 – Square metre
mn – Million
MOEX – Moscow Exchange
NCR – National Credit Rating agency
NGO – Non-Governmental Organisation
OHS – Occupational Health and Safety
OHSCS – Occupational Health and Safety Control System
p.p. – Percentage Point
PBL –Pick by Line
PL – Private Label
Q – Quarter of the Year
QMS – Quality Management System
RUB – Russian Rouble
SG&A – Selling, General and Administrative Expenses
SKU – Stock Keeping Unit
VAT – Value Added Tax
VMI – Voluntary Medical Insurance
WHT – Withholding Tax
WMS – Warehouse Management System
YMS – Yard Management System
YoY – Year-on-Year
Abbreviations
3PL – Third Party Logistics
ACORT – Association of Retail Trade Companies
AIX – Astana International Exchange
BMS – Building Management System
bn – Billion
C&D – Cats and Dogs
CEO – Chief Executive Officer
CJSC – Closed Joint Stock Company
CRM – Customer Relationship Management
DC – Distribution Centre
DLP – Data Loss Prevention
EBITDA – Earnings before Interest, Taxes, Depreciation
and Amortisation
EDLP – Every Day Low Price
ESG – Environmental, Social, and Governance
Expert RA – Expert Rating Agency
F&V – Fruits and Vegetables
FMCG – Fast-Moving Consumer Goods
FY – Financial Year
GDR – Global Depositary Receipt
GFSI – Global Food Safety Initiative
HACCP – Hazard Analysis and Critical Control Points
HR – Human Resources
HVAC – Heating, Ventilation and Air Conditioning
IFRS – International Financial Reporting Standards
IPO – Initial Public Offering
IR – Investor Relations
IT – Information Technology
JSC – Joint Stock Company
k – thousand
134 – 135 Annual Report Overview
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LED – Light Emitting Diodes
LFL – Like-for-Like Sales
LLC – Limited Liability Company
LSE – London Stock Exchange
m 2 – Square metre
mn – Million
MOEX – Moscow Exchange
NCR – National Credit Rating agency
NGO – Non-Governmental Organisation
OHS – Occupational Health and Safety
OHSCS – Occupational Health and Safety Control System
p.p. – Percentage Point
PBL –Pick by Line
PL – Private Label
Q – Quarter of the Year
QMS – Quality Management System
RUB – Russian Rouble
SG&A – Selling, General and Administrative Expenses
SKU – Stock Keeping Unit
VAT – Value Added Tax
VMI – Voluntary Medical Insurance
WHT – Withholding Tax
WMS – Warehouse Management System
YMS – Yard Management System
YoY – Year-on-Year
Abbreviations
3PL – Third Party Logistics
ACORT – Association of Retail Trade Companies
AIX – Astana International Exchange
BMS – Building Management System
bn – Billion
C&D – Cats and Dogs
CEO – Chief Executive Officer
CJSC – Closed Joint Stock Company
CRM – Customer Relationship Management
DC – Distribution Centre
DLP – Data Loss Prevention
EBITDA – Earnings before Interest, Taxes, Depreciation
and Amortisation
EDLP – Every Day Low Price
ESG – Environmental, Social, and Governance
Expert RA – Expert Rating Agency
F&V – Fruits and Vegetables
FMCG – Fast-Moving Consumer Goods
FY – Financial Year
GDR – Global Depositary Receipt
GFSI – Global Food Safety Initiative
HACCP – Hazard Analysis and Critical Control Points
HR – Human Resources
HVAC – Heating, Ventilation and Air Conditioning
IFRS – International Financial Reporting Standards
IPO – Initial Public Offering
IR – Investor Relations
IT – Information Technology
JSC – Joint Stock Company
k – thousand
134 – 135 Annual Report Overview
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Operational
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Review Corporate Governance
Financial
Statements 2023
Auditor
Moore Audit S.A.
Luxembourg 3378 Livange, 5 rue de Turi
Tel.: +352 26 26 84 1
moore-global.com
Contacts
Contacts for Investors
and Media
Natalya Belyavskaya
Head of Investor Relations
Tel.: +7 (495) 663–66–77, ext. 266
Email: Natalya.Belyavskaya@okmarket.ru
Ekaterina Nayda
Head of Corporate
Tel.: +7 (495) 663–66–77, ext. 458
Email: Ekaterina.Nayda@okmarket.ru
Marina Shagulina
Luxemburg Administrative Officer
Tel.: +352 (24) 52–70–84
Email: Marina.Shagulina@okeygroup.lu
Addresses
23A Kirovogradskaya, bld. 1, Moscow, 117534
4/1 Energetikov avenue bld. 1, Saint-Petersburg, 195112
25C Boulevard Royal, L-2449 Luxembourg, Luxembourg
okeygroup.lu
Depositary
Bank of New York Mellon
101 Barclay Street, New York, 10286, U.S.A.
bnymellon.com
136 – 137 Annual Report Overview
Strategic
Report
Operational
Review
Financial
Review Corporate Governance
Financial
Statements 2023
Moore Audit S.A.
Luxembourg 3378 Livange, 5 rue de Turi
Tel.: +352 26 26 84 1
moore-global.com
Contacts
Contacts for Investors
and Media
Natalya Belyavskaya
Head of Investor Relations
Tel.: +7 (495) 663–66–77, ext. 266
Email: Natalya.Belyavskaya@okmarket.ru
Ekaterina Nayda
Head of Corporate
Tel.: +7 (495) 663–66–77, ext. 458
Email: Ekaterina.Nayda@okmarket.ru
Marina Shagulina
Luxemburg Administrative Officer
Tel.: +352 (24) 52–70–84
Email: Marina.Shagulina@okeygroup.lu
Addresses
23A Kirovogradskaya, bld. 1, Moscow, 117534
4/1 Energetikov avenue bld. 1, Saint-Petersburg, 195112
25C Boulevard Royal, L-2449 Luxembourg, Luxembourg
okeygroup.lu
Depositary
Bank of New York Mellon
101 Barclay Street, New York, 10286, U.S.A.
bnymellon.com
136 – 137 Annual Report Overview
Strategic
Report
Operational
Review
Financial
Review Corporate Governance
Financial
Statements 2023